Advertising Digital Innovation
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Ecom ad spending is growing “much faster” than total digital advertising: GroupM

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According to the latest report on E-commerce trends by GroupM, e-commerce related spending on advertising is growing much faster than total digital advertising, and holds implications for both marketers and media owners.

“The increasing importance of e-commerce is two-fold,” the report notes. “It shapes the behaviors of consumers and manufacturers and it also has a significant impact on the media industry because of the different ways advertising is used to support different kinds of e-commerce activity.”

Key takeaways from the report:

E-Commerce is still growing but is decelerating in key markets and will decelerate globally by a couple of percentage points.

  • According to data from the U.S. Census Bureau, e-commerce in the United States grew by +14% in 2018 following on a +16% growth rate in 2017. However, growth appears to be decelerating further in 2019 as the sector rose by +12% in the first quarter of this year. 
  • China’s official government statistics service indicated online retail sales of physical goods were up +25% in 2018 versus +28% in 2017. Sales slowed further in the first quarter, rising +21%.
  • Meanwhile, in Europe, trade association Ecommerce Europe estimates +12% growth there in 2018, down from +14% in 2017.

Marketplaces are dominating e-commerce and are growing faster than the overall industry.

With annual spending on e-commerce around the world amounting to $2.9 trillion (on Internet Retailer’s estimates), marketplaces account for a majority of activity and are growing faster than the overall industry.

The top 100 marketplaces generated $1.7 trillion in sales in 2018, up +20% year-over-year, which followed on 34% growth during 2017 for a similar group of entities.

E-commerce-related spending on advertising is growing much faster than total digital advertising. 

  • Amazon accelerated its spending on advertising during 2018 as well, with +30% growth last year vs. +26% growth in 2017.
  • A composite of eBay, Wayfair, Stich Fix, Etsy and Overstock increased spending on advertising by +23% during 2018 after expanding by +19% in 2018. 
  • Looking only at Wayfair, Stich Fix, Etsy and Overstock, advertising growth was +45% in 2018 after growth of +38% in 2017.

As e-commerce takes on greater importance, implications for media owners follow.

Click here to download the GroupM report:
E-commerce trends: Marketplaces thrive, D2C slows

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