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The retail industry will steady the US digital ad market

The retail industry commits by far the most dollars to digital advertising in the US. It has accelerated ad spending with above-average growth every year since 2020, fueled by the rising importance of ecommerce and digital channels in the consumer journey. By comparison, online ad spending by most other industries we track has seen far greater fluctuations from year to year over the same period. Retail’s ad spending growth will see sustained growth this year and next before other industries start to catch up on spending in 2025.

The retail industry will maintain its enormous lead in digital ad spending.

  • No other industry comes close to retail. Well over a quarter (27.9%) of US online ad dollars spent this year will come from retailers, totaling $73.55 billion. That’s over $34 billion more than the next biggest spender, consumer packaged goods, which has a 15.0% share of the digital ad market. And retail’s share continues to grow, for now—it will peak at 28.6% next year before contracting slightly to 28.3% in 2025.
  • Retail’s surge in digital ad spending follows the ecommerce boom. The increases in digital ad spending by retailers have accompanied the near doubling of US retail ecommerce sales over the five-year period from 2019 to 2023, from just under $600 billion to $1.137 trillion, per our forecast.
  • What does it mean for marketers? Retail’s outsized influence on US digital advertising can’t be underestimated. Despite ongoing economic headwinds, US consumers will continue to spend more on online purchases—going from an average of $5,213 per digital buyer this year to $6,164 in 2025, per our forecast. Retailers will simply follow the money.