Table of Contents
Overview
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- What you need to know
- Key issues covered in this Report
- Definition
- COVID-19: Market context
- Economic and other assumptions
Executive Summary
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- Top Takeaways
- Market Overview
- Growth slows due to COVID-19, but digital will remain substantial
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- Figure 1: Total US digital advertising revenues and forecast, at current prices, 2015-25
- Impact of COVID-19 on Digital Advertising
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- Figure 2: Short-, medium- and long-term impact of COVID-19 on advertising, August 2020
- Opportunities and Challenges
- Re-emergence
- Recovery
- Marketers need to tailor their ad mix to their target audience
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- Figure 3: Online ads in the past seven days, by age, June 2020
- Partnering with live streamers could reach a highly engaged audience
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- Figure 4: Frequency of content consumed per week, by content consumed, June 2020
- Brands are challenged to reach ad avoiders
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- Figure 5: Number of ad-avoidance methods, June 2020
- Brands need to beware of ad fatigue
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- Figure 6: Digital ad behaviors, June 2020
- Follow the consumer
The Market – Key Takeaways
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- US digital ad market to grow despite COVID-19
- Mobile ads garner majority of overall digital ad spend
- Paid search remains the largest digital ad channel
- Digital video advertising is the fastest growing
- Digital voice assistants will play a growing role as usage increases
- 2020 election year should spur further digital advertising revenue
Market Size and Forecast
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- COVID-19 pauses ad spending, but digital will be first to return to growth
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- Figure 7: Total US digital advertising revenues and forecast, at current prices, 2015-25
- Figure 8: Total US digital advertising revenues, at current prices, 2015-25
- Impact of COVID-19 on digital advertising
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- Figure 9: Short-, medium- and long-term impact of COVID-19 on advertising, August 2020
- Lockdown
- Re-emergence
- Recovery
- COVID-19: US context
- Learnings from the last recession
Segment Performance
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- Mobile-based marketing drives growth
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- Figure 10: Digital ad revenue, by desktop and mobile, 2010-19
- Paid search remains the mature staple of digital advertising
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- Figure 11: Breakout of US digital ad spend, by segment, at current prices, 2018-20
- Figure 12: Breakout of US digital ad spend, by segment and year-over-year percentage change, 2014-20
- Digital video marketing continues rapid growth
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- Figure 13: Breakout of US digital ad spend growth, by segment, at current prices, 2015-20
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- Figure 14: Breakout of US digital ad spend share, by segment, 2014-20
Market Perspective
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- Digital voice assistants can still grow in a marketing role
- AR/VR adoption could bring new marketing platforms to consumers
- White space to leverage zero-party data
- Transition to ad-free streaming services increases value of remaining video inventory
Market Factors
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- Legislation could quickly transform digital marketing landscape
- Mass pullback in advertising due to overall market uncertainty
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- Figure 15: US real GDP growth (annual percent change), 2007-21
- 5G developments could bring more connectivity on-the- go
- Click fraud continues to concern digital industry
- Podcast downloads taking a hit due to COVID-19
Market Opportunities
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- 2020 Election should generate significant ad spend
- Programmatic digital video ads should boost video ad segment
- Social media offers low-cost advertising from organic fans and influencers
- High-volume streamers could spur revenue for ad-supported services
- Unsold digital video inventory needs to be accessed
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- Figure 16: ESPN streaming commercial break screen, August 2020
Companies and Brands – Key Takeaways
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- Google Search generated nearly $100 billion in 2019
- Facebook flourishes despite widespread boycotts
- Twitter stops accepting political ads
- TikTok faces potential ban in US
- Spotify makes major push to podcasting
- Comcast’s internal ad operations look to leverage vertical integrations
- The Trade Desk continues rapid growth but faces COVID-19 headwinds
- Shopify continues to grow its merchant count
Competitive Strategies
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- Shifting retail behavior spurs Amazon’s search revenue
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- Figure 17: Google and Amazon ad search revenues, by quarter, July 2018-June 2020
- Twitter decides to ban political ads
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- Figure 18: Twitter and Facebook quarterly revenue, July 2018-June 2020
- Local businesses go digital to replace pre-COVID foot traffic
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- Figure 19: Shopify quarterly revenue, July 2018-June 2020
- Spotify invests significant sums into podcasting
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- Figure 20: Total podcast ad revenue, 2015-20
- Comcast’s FreeWheel to integrate linear and digital video advertising
The Consumer – Key Takeaways
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- Media consumption is on the rise post COVID-19
- Live streaming and gaming streaming get more regular viewership
- Social media and email ads have highest levels of recall
- One third of consumers use multiple methods to avoid online ads
- Inefficient ad targeting leaves room for improvement
- Entertaining ads correlated with purchasing
- Ad fatigue could alienate potential customers
- Ads are necessary but a nuisance
Consumer Trends and Digital Advertising
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- Consumers go digital and advertising dollars follow
- Technology
- Rights
Content Consumption: Pre- and Post-COVID-19
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- Content consumption is widespread
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- Figure 21: Content consumed in an average month, June 2020
- Streaming skews heavily toward younger consumers
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- Figure 22: Content consumed in an average month, by age, June 2020
- Live video streaming a popular daily source of entertainment
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- Figure 23: Frequency of content consumed per week, by content consumed, June 2020
- COVID-19 shutdowns lead to overall increase in media consumption
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- Figure 24: Content consumption since COVID-19, June 2020
- Nearly half now spend at least three hours per day watching video content
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- Figure 25: Daily video consumption, before and since COVID-19, June 2020
Online Ad Recall from Past Seven Days
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- Social media and email ads top consumer recollection
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- Figure 26: Online ad recall from the past seven days, June 2020
- Email effective for older consumers, social for younger consumers
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- Figure 27: Online ad recall from the past seven days, June 2020
- Four in 10 recall seeing at least three types of digital ads in past week
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- Figure 28: Number of online ad types recalled from the past seven days, June 2020
- Older consumers least likely to recall digital ads
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- Figure 29: Number of online ad types recalled from the past seven days, by age, June 2020
Online Ad Results
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- Nearly half recall an ad for something they had no interest in
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- Figure 30: Online ad results, June 2020
- Podcast and influencer ads more highly correlated with purchase behaviors
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- Figure 31: Online ad results, by online ad recall from the past seven days, June 2020
- Younger men are more engaged with digital ads
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- Figure 32: Online ad results, by gender and age, June 2020
- Entertaining ads linked with commercial success
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- Figure 33: Online ad results, by consumers entertained by an ad, June 2020
Online Ad-Avoidance Methods
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- A third of users use ad-blocking software
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- Figure 34: Ad-avoidance methods, June 2020
- Consumers aren’t going out of their way to avoid online ads
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- Figure 35: Number of ad-avoidance methods, June 2020
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- Figure 36: Ad-avoidance methods, by number of methods used to avoid ads, June 2020
- Figure 37: Online ad results, by number of ad-avoidance methods used, June 2020
- Men are more likely to utilize ad-avoidance methods
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- Figure 38: Ad-avoidance methods, by gender, June 2020
- Figure 39: Number of ad-avoidance methods, by gender and age, June 2020
Attitudes and Behaviors toward Digital Ads
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- One third of users would stop using a streaming service if ads increased
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- Figure 40: Attitudes toward online video ads, June 2020
- Nearly half of consumers get annoyed at repeated ads
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- Figure 41: Digital ad behaviors, June 2020
- Too many ads on apps will lead to deletions
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- Figure 42: Digital ad behaviors, by age, June 2020
- Willingness to exchange personal information correlated with higher engagement
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- Figure 43: Digital ad behaviors, by digital video ad behaviors – willing to give personal information, June 2020
Attitudes toward Advertising
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- Ads are considered a necessary nuisance
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- Figure 44: Attitudes toward advertising – digital ads, June 2020
- COVID-19 messaging generally welcomed by general public
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- Figure 45: Attitudes toward advertising – COVID-19 messaging, June 2020
- Cynicism correlated with higher ad-avoidance behaviors
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- Figure 46: Ad-avoidance methods used, by attitudes toward advertising – COVID-19, June 2020
- Consumers are more comfortable with ads from local businesses
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- Figure 47: Attitudes toward advertising – local businesses, June 2020
- Consumers hesitant to share personal information and location to advertisers
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- Figure 48: Attitudes toward advertising – exchanging info, June 2020
Consumer Segments – Attitudes toward Advertising
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- Four segments of consumers identified based on attitudes toward advertising
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- Figure 49: Consumer segments of attitudes toward advertising, June 2020
- Ad Acceptors (19%)
- Characteristics
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- Figure 50: Characteristics of Ad Acceptors, June 2020
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- Figure 51: Online ads recalled in past seven days, by consumer segments of attitudes toward advertising, June 2020
- Opportunities
- Ad Apathetics (31%)
- Characteristics
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- Figure 52: Characteristics of Ad Apathetics, June 2020
- Opportunities
- Ad Adversaries (24%)
- Characteristics
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- Figure 53: Characteristics of Ad Adversaries, June 2020
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- Figure 54: Online ad-avoidance methods, by consumer segments of attitudes toward advertising, June 2020
- Opportunities
- Ad Apprehensives (26%)
- Characteristics
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- Figure 55: Characteristics of Ad Apprehensives, June 2020
- Opportunities
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 56: Total US digital advertising revenues, at current prices, 2015-25
- Figure 57: Total US digital advertising revenues, at inflation-adjusted prices, 2015-25
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Appendix – Mintel Global Trend Drivers
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- Figure 58: Mintel Trend Drivers and Pillars
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