US DIGITAL ADVERTISING SNAPSHOT

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1 September 2016 US DIGITAL ADVERTISING SNAPSHOT This year, for the first time, US digital ad spending will outpace spending on TV advertising, and digital growth especially on mobile is still strong. This Snapshot provides a key to US digital ad spending trends, including infographics illustrating how digital fits into the total media ecosystem, how mobile fits into digital, and how quickly advertisers across industries are increasing their digital budgets. presented by

2 Digital Advertising in the US This year, US advertisers are devoting 36.8% of their paid media budgets to digital channels, including 23.5% going specifically to mobile buys. In 2017, digital s share of the pie will reach 40.0%, and more than a quarter of total media ad spending will go toward mobile. Total media ad spending 2016 Mobile 23.5% Digital 36.8% Desktop/laptop 13.4% 2016 is the first year US advertisers will spend more on digital placements than TV commercials. % of total media ad spending Television Digital Desktop/laptop Mobile % 32.7% 15.4% 17.3% % 36.8% 13.4% 23.5% % 40.0% 12.3% 27.7%

3 Digital Ad Formats 0.4% Mobile messaging 0.4% Classifieds and directories 2.5% Lead generation 2.6% Search 46.2% This year is the first year US advertisers will devote more digital dollars to display ads than search. Display formats will continue gaining share through at least 2020 thanks mostly to video and rich media. Video 14.3% Sponsorships 2.6% Display 47.9% Rich media 11.1% Banners and other 20.0% Display formats are growing almost twice as fast as search this year, though growth rates are expected to even out by Search 15.4% Classifieds and directories 0.5% 13.2% Lead generation 7.3% Mobile messaging 7.9% Total growth Display 28.4% Banners and other 20.8% Rich media 42.4% Sponsorships 10.2% Video 34.1%

4 Mobile Ad Formats Search 44.1% Other 0.6% Mobile messaging 3.9% On mobile, display has a bigger lead over search ad spending. By next year, video alone will account for 1 10 of mobile ad spending in the US. Video 9.7% Display 51.4% Banners, rich media, sponsorships and other 41.6% Spending on all mobile ad formats other than SMS is still growing at solid double-digit rates, a trend expected to continue through at least Total growth 45.0% Search 43.1% Other 3.9% Mobile messaging 7.9% Display 45.8% Banners, rich media, sponsorships and other 44.0% Video 54.5%

5 Where s Ad Spending Going? More than two-fifths of all digital ad spending in the US will go to Google this year, with second-place Facebook taking in a much smaller share of the pie. No other digital ad publisher will enjoy even 4% of total revenues in the US. Snapchat 0.5% Yelp 0.8% LinkedIn 1.0% Twitter 1.9% Amazon 1.3% IAC 0.8% Verizon (AOL and Millennial Media) 1.8% Microsoft 3.8% Google 41.0% Yahoo 3.1% Facebook 16.6% Facebook 77.7% Within the realm of social network advertising, however, Facebook is clearly king, grabbing more than three-quarters of US revenues this year. Social games 2.2% LinkedIn 4.8% Twitter 8.7% Snapchat 2.3% Other 4.4%

6 How Fast Are Vertical Industries Moving to Digital? Retail is by far the biggest-spending industry on digital channels, accounting for about one-fifth of all US digital advertising. Retailers will make up nearly 22% of the total each year through at least The auto industry will also hold on to its second-place position through the end of our forecast period. Entertainment 4.8% Other 4.3% Healthcare & pharma 2.8% Retail 21.9% Financial services 12.2% Media 5.9% Automotive 12.7% Computing products & consumer electronics 7.6% Travel 8.3% CPG & consumer products 11.0% Telecom 11.0% Retail industry digital ad spending is growing about on pace with the average rate, but CPG, media and automotive, among other industries, are increasing their digital budgets more quickly. Media 22.6% Automotive 22.4% CPG & consumer products 23.3% Travel Entertainment Retail 20.0% Financial services 19.5% Computing products & consumer electronics Telecom 19.4% Healthcare & pharma Other 15.2% Total growth

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8 The leading research firm for marketing in a digital world. Coverage of a Digital World emarketer data and insights address how consumers spend time and money, and what marketers are doing to reach them in today s digital world. Get a deeper look at emarketer coverage, including our reports, benchmarks and forecasts, and charts. emarketer Corporate Subscriptions: The Fastest Path to Insight All emarketer research is available to our clients via an annual corporate subscription. The subscription provides clients with access to all emarketer analyst reports, signature charts, interviews, case studies, webinars and more. See for yourself how easy it is to find the intelligence you need. Learn more about subscription options. Confidence in the Numbers Our unique approach of analyzing data from multiple research sources provides our customers with the most definitive answers available about the marketplace. Learn why. Schedule a personalized demonstration or request a quote today. Go to emarketer.com, call , or sales@emarketer.com.

US AD SPENDING. The emarketer Forecast for MARCH 2017 Corey McNair Contributors: Monica Peart. Read this on emarketer for ipad

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