The Digital Advertising
Stats You Need for2018Intro2017 was another big year for advertisers, publishers, and ad
tech providers. We saw the continued dominance of clientside header bidding as well as the advent of server-to-server;
the announcement of a new ad tech consortium to makecookieless, cross-device targeting a reality; a promisingindustry response to fraud in the form of ads.txt; and the
beginnings of a potential machine learning revolution in ad tech.
But if there’s one thing that’s clear about our industry, it’s this:Change is the rule, not the exception – so, you can expect awhole lot more of it in 2018. In order to help you prepare, we’ve
compiled this data-driven guide. Inside, you’ll find the numbers,
charts, and graphs you need to refine your 2018 strategy,
including information on emerging formats, header bidding
adoption, the state of the duopoly, and more! Read on, arm
yourself with knowledge, and get ready for a productive 2018!

Table ofContents
The U.S. Digital and Programmatic Landscape
Digital Advertising Around the WorldVideo
NativeMobileAd Fraud
Machine Learning and AI
Header Bidding
Duopoly

4
9
15
23
28
34
39
43
48

The U.S. Digitaland ProgrammaticLandscape4

Total Projected
U.S. Digital Ad Spend
Digital Ad Spending (billions)
Percent of Total U.S. Ad Spend$140$129.26$117.53$105.44$93.75

Total Spend (Billions)

$100

45%

46.56%$71.60$59.8243.62%$60

40%

40.48%$40

36.71%$2035%

32.70%

$0

30%
2015

Source: eMarketer

48.94%$83.00$8051.31%

50%

Percent of Total U.S. Ad Spend$120

Some good news:
Digital ad spend
continues to rise
and take up a
bigger share of all
ad dollars. By 2021,
digital ad spend
is expected torepresent a majorityof all U.S. ad spend.

55%

2016

2017

2018

2019

2020

2021
5

Total Projected
U.S. Programmatic
Ad Spend (Display)
100%

$50

$45.72

Percent of Total Digital Display Ad Spend
$45

95%

$39.10$40$32.56

Total Spend (Billions)$35

Even better,2017 saw total
programmatic
spend increase more
and take up a bigger
piece of the total
digital pie, though
growth seems to belevelling off.

85%

$30

$25.4881.50%$17.5078.00%

80%

75%

$15
$10
$5

70%

73.00%

65%

65.00%

$0

60%
2015

Source: eMarketer

83.60%

$25
$20

90%

Percent of Total U.S. Digital Display Ad Spend

Programmatic Digital Ad Spending (billions)

2016

2017

2018

2019
6

U.S. Desktop
Display Viewability
Rates by Ad Size
78.10%

300x1050

66.80%Ad Size

160x600

Total viewability for desktop
display ads is 53.6%,
meaning that nearly half ofall display ads purchased
are never seen by anyone.

300x600

64.70%

970x6662.00%

970x250

54.00%

970x9053.50%

300x25052.90%

728x9049.80%
0%

10%

20%

30%

40%

50%

60%

70%

80%

In-View Rate
Source: eMarketer

7

U.S. Display Ad
Click-ThroughRates by Format

0.08%

0.08%

Custom
In-PageEnhanced
Banner0.06%
Rich Media

0.07%
Image

0.03%
HTML Banner

Enhanced banner andcustom in-page ads
attract the most clicks inthe display category.
Source: eMarketer

0.05%
Flash In-Page

8

Digital Advertising
Around the World

9

Projected Digital Ad Spendby Country: 2017 vs. 2018

Of the top five digitalad markets, China is
expected to see the most
growth in 2018 at 13.9%.

(Markets of $7B and above)
2017
2018

$100

$97.16$86.39Total Spend (Billions)

$80

$60

$44.59$50.76$40$14.70 $16.17$20$12.32 $13.06

$7.73

$8.23

$0

US
Source: PWC Outlook

China

UK

Japan

Germany
10Projected Digital Ad Spendby Country: 2017 vs. 2018

Digital ad spend in Indonesia is
expected to grow a whopping
27.8% in 2018. Other countries
expecting substantial growth
are Mexico at 17.4%, Russia at
13.8%, and Brazil at 12.8%.

(Markets between $1B and $7B)
2017
2017 + 2018

$7.00

$6.76

$6.00

$5.66
$6.20

$5.15

Total Spend (Billions)

$5.00

$5.24
$4.00

$4.57
$4.77
$4.20

$3.00

$2.56

$2.26

$2.38

$2.21

$2.22

$2.00

$2.27

$2.14

$2.09

$1.00

$2.03

$2.00

$2.01
$1.86

$1.90

$1.67

$1.50

$1.48

$1.48

Indonesia

Switzerland

$1.34

$1.38

$1.28

$1.25

$1.23

MexicoDenmark

Hong Kong$0.00

Australia

Source: PWC Outlook

South Korea

CanadaFranceBrazil

Italy

RussiaNetherlands

SwedenSpain

11

Projected Digital Ad Spendby Country: 2017 vs. 2018

While all of these countries had
relatively low digital ad spend in 2017,nearly all of them are expecting doubledigit growth in 2018. India especiallystands out, with an expected 24.0%
growth rate in 2018 and a population ofover 1 billion potential consumers.

(Markets below $1B)
2017
2017 + 2018

$1.20

$1.00

Total Spend (Billions)

$0.80

$0.60

$0.40

Source: PWC Outlook

Pakistan

VietnamVenezuela

Nigeria

Romania

Peru

Egypt

Kenya

Portugal

Colombia

South Africa

Chile

GreeceFinlandSingapore

Saudi Arabia

Hungary

UAE

Malaysia

Philippine

IzraelThailandIreland

Austria

New Zealand

Belgium

Czech Republic

Argentinaa

TurkeyIndia

PolandNorwayTaiwan$0.20

12

Source: PWC Outlook

Japan
Italy
FinlandFranceBelgiumSouth Korea
CanadaSpain
Denmark
Germany

Switzerland
TurkeyCzech Republic
NorwayHungary
SwedenNew Zealand
UK
TaiwanAustralia
Austria
Netherlands

China
RussiaSingapore
IrelandHong Kong
BrazilIsraelUS

UAE
Saudi Arabia
Colombia
Argentina
Kenya
Peru
PolandSouth Africa
PortugalMexicoVenezuela
GreeceRomania

Pakistan
Egypt
Indonesia
Philippines
Thailand
Malaysia
India
Nigeria
VietnamChile

How much will digital ad
spend grow this year ineach country?
2018 Projected Digital Ad
Spend Growth by Country

40%

35%

30%

25%

20%

15%

10%

5%

0%

13

Projected Digital
Ad Spend by Region
Through 2021

Looking at the broader regional trends,
this is the year Asia-Pacific is expected
to overtake North America as the world’s
leading destination for digital ad dollars.

Asia PacificNorth America
Western Europe$160.00

Latin America
Central & Eastern Europe$140.00

Middle East & Africa$100.00$80.00$60.00Total Spend (Billions)$120.00$40.00$20.00$0.00

2015
Source: eMarketer

2016

2017

2018

2019

2020

2021
14

Video15

Total Projected U.S.
Programmatic Video
Ad Spend$13.43$14.00Programmatic Digital Video Ad Spending (billions)

90%

Percent of Total Digital Video Ad Spending$11.43$12.0069.00%

Total Spend (Billions)$10.00The last two years have seena huge influx of dollars into
the US programmatic video
market. Growth is expected
to continue, but at a slower
pace in 2018 and beyond.

76.50%
70%

60.00%

$8.00

$9.13

60%

$6.00

$6.42
$4.00

50%

$3.00

40%

$2.00

39.00%
$0.00

30%
2015

Source: eMarketer

74.00%

Percent of Total Digital Video Ad Spend

80%

2016

2017

2018

2019
16

Projected Share of
Programmatic Video Ad Spend
by Device, 2017 vs. 2018

Desktop45%

Mobile55%
2017

Source: eMarketer

2017 is the year mobile
overtook desktop in
programmatic video ad
spend. The gap is expected
to widen further in 2018.

Desktop42%

Mobile

58%
2018
17

2017 Video Ad
Benchmarks

61.67%
Viewability Rate

Source: eMarketer

The completion benchmarks every
video advertiser needs to know.

70.67%
ViewableCompletion Rate

71.33%
Completion Rate18

Video Ad Formats Users
Report as Interruptive(U.S. Internet Users)

Desktop

Outstream

Publishers and advertisers
may want to be weary of
mid-roll ads – on bothdesktop and mobile – asusers are most likely to say
they find them interruptive.
Source: eMarketer

Pre-roll

Mid-roll

Mobile46% 60%17% 17%
53% 72%19

Projected U.S. Viewership:
Digital video vs. Broadcast TV,
2017-2021
Digital Video Viewers

Cord-cutting: Through 2018 andbeyond, people will be watchingless broadcast TV and more digital
video every year, fleeing broadcast
for digital options, includingOver-The-Top (OTT) content via
Connected TV (CTV) devices.

Broadcast TV Viewers$250

Total Spend (Millions)

$200

222.7
196.3

192.0

244.3

239.4

234.5

228.8

188.3

$150

184.7

181.7

$100

$50

$0

Source: eMarketer

2017

2018

2019

2020

2021
20

Average Time per Day
Spent with Video for
U.S. Adults: TV vs.
Digital Time per day(Hours:Minutes)
TV

Consequently, as
digital video grows, we’reseeing users spend lessand less time per day
watching broadcast TV.

Digital Video

1:01

1:10

1:17

1:22

1:26

4:10

4:05

3:58

3:52

3:47

2015

2016

2017

2018

2019

Source: eMarketer

21

U.S. CTV Users by Device

With over 168 million users in
the U.S. alone, CTV keeps on
growing. But which CTV devices
are the cord-cutters flocking to?

81.2
$80

62.8

$70

21.3

29.0

35.8

36.9

$50

38.9

$40
$30

Device Users (Millions)

$60

$20
$10
$0

Apple TV
Source: eMarketer

Blu-Ray Player

AmazonFire TV

GoogleChromecast

Roku

Connected Game
ConsoleSmart TV
22

Native23

Total Projected U.S.
Native Ad Spend(billions)

.09
$22

$16.212018 2017 2016Native ad spend in
the US is estimatedto reach $28 billion in
2018, a 27.8% percent
increase from 2017.
Source: eMarketer

27.8%
YoY Projected
Increase

4
2
.
8
$2
24

2017 Share of Total Native Ad
Spend: Social Networks vs.
All Other Native Display
15.84%All Other
Native Ad
Spend

84.16%

Native Social Network Spend

Source: eMarketer

The vast majority of that spend
goes to social networks. Native
advertising on the open internet –what most people probably think ofwhen they think native – accounted
for just under $3.5 billion in spend.
25

Click-Through Rates (CTR):All Display vs. Native Display

0.80%

0.09%
All Display

Native Display

CTRs for native display
ads are 8.8x higher than
the average display ad.
Source: eMarketer

26

0.20%

Source: eMarketer

0.40%

B2C

Technology B2B 0.50%

Health & Fitness

SportsAutomotive

Education

Business

CPG

Entertainment

0.65%

0.65%

0.70%

0.70%

0.75%

0.80%

0.80%

0.80%

Finance & Insurance

0.90%

0.90%

0.80%

0.60%

Home & Garden

Style & Fashion

Technology B2C

1.00%
0.90%

0.80%

TravelFamily & Parenting

1.10%

1.10%

1.00%

Food & DrinkPets

Native Ad Click-ThroughRates by Brand Category

0.00%

Native ads have
performed particularly
well for advertisers in
the Pets, Food & Drink,
and Family & Parenting
brand categories.

B2B

27

Mobile28

Total Projected U.S. Mobile
Programmatic Ad Spend

Programmatic mobile spend in the
US continues to rise, and madeup 74.1% of all programmatic
display spend in 2017. That share is
expectedto climb to 77.0% in 2018.

$35$36.09$30$30.09Total Spend (Billions)$25$24.14$20$17.99$15$10$10.68

$5

$0

2015
Source: eMarketer

2016

2017

2018

2019
29

U.S. Programmatic
Mobile Ad Spend:
In-App vs. Mobile Web

97%
In-App3%

Mobile Web

In-app ads dominate mobile
programmatic ad spend.
That shouldn’t be a surpriseconsidering the average U.S.
consumer spends 89% of theirtime on their smart phone in-app.
Source: Smaato

30

2017 U.S. Mobile Ad
Spend by Ad Format

Display, search, and richmedia are the formats
driving mobile ad spend.

$30.25

Total Spend (Billions)$30.00$25.69$24.28$20.00$10.00

$5.96
$2.15

$0.00

Display Ads

Source: eMarketer

SearchRich Media

OnlineVideo Ads

Other
(cleassifieds/
email, lead gen)31

Projected U.S. Mobile
Ad Spend by Format,
2017-2021

We expect each of those formats togrow in the coming years, especially
video, display, and search.

Display
Search$52.69Banner, Rich Media, Sponsorship$44.81$38.13$40.65$33.79$36.05$29.07$30.75$36.30$24.28

$40

$30

$4.51

$10.84
$4.21

$9.72
$3.60

$8.57
$2.71

$2.15

$7.22

$20

$5.96

$25.69$30.25$42.36$47.85

Other (Classifieds, Email, Lead Gen)$50

$41.85

Video

$10

$0

2017
Source: eMarketer

2018

2019

2020

2021
32

U.S. Mobile Display
Ad Viewability Rates

3.90%

Performance benchmark:How long are mobile ads in view?

%
47.20
20%
28.
%
.60
19
%
70

0%
7.8

14
.

In-View Rate (60+ sec)
In-View Rate (30+ sec)
In-View Rate (15+ sec)
In-View Rate (10+ sec)
In-View Rate (5+ sec)
In-View Rate

Source: eMarketer

33

Ad Fraud34

Global Estimated Ad
Revenue Lost to Fraud!

Ad fraud accounted for over $14
billion in lost revenue in 2017.
By 2022, that total is expected
to rise 214% to $44 billion –unless we band together tostop it in its tracks.

2022 estimate$44.00(billions)2017$14.20Source: Juniper Research

35Estimated Global Ad
Fraud Rates by Format
and Transaction Type

When it comes toprogrammatic, mobile
display inventory presents
the highest risk of fraud.

Detected Rate of Ad Fraud
Desktop
DislayProgrammatic Buys

Direct Buys

MobileDisplayDesktopVideo

MobileVideo

12% 15% 13%

2%

10%

4%

Source: Integral Ad Science (Please note: This chart’s data reflects fraud rates for buyers not using ad fraud prevention technology)

6%

16%

36

Reasons SeniorMarketers Give for Not
Buying Programmatic
Fraud is the second-leading reason
marketers provide for not buying ads
programmatically.

18%

7%

Ad misplacementin problem
searches/content
channels

7%

Social media risks
and reputation
management

5%

Fake news anddigital media
mistrust

Source: CMO Council and Dow Jones

5%

Viewabilityof digitaladvertising

7%

Budgetlimitations

7%

Incompatiblesite content

7%

Phishing, scams
and/or brandhijackingMedia buying
transparency andaccountability

9%
Other

13%
Ad fraud andwebsite traffic
verification

37

How Mobile Ad
Executives Say They’re
Responding to Ad Fraud
Given the heightened fraud risk inmobile programmatic, Forrester
asked 250 marketing leaders
how they’re fighting back. Manyof their responses are applicable
across all formats and channels.

We aggressively
update blacklists

6%
Have not responded
yet but plan to

Source: Forrester and AppsFlyer

We reduced the media
budget assigned to inapp advertising25%
We subscribe to a
blacklist service

We use data andanalytics tools tounderstand andmeasure suspicious
patterns for mobile
ad fraud

32%

25%
19%

48%

28%
We implementtarget white lists

Require clarity fromvendors on how they
combat fraud31%
We reduced the media
budget assigned tomobile web advertising53%
We have assigned
fraud-related KPIs
to our media buying
agency and ad
networks

43%
Third-party traffic
validation technology

32%
Require clarity fromvendors on how they
combat fraud

38

Machine
Learningand AI

39

Projected Worldwide
AI Technology Investment

Companies acrossnearly all industries
are expected to rapidly
embrace artificial
intelligence in 2018
and beyond.

$2.35
2017

Source: eMarketer

$6.03
2018

$11.452019$19.282020$28.962021

40

Retail Marketers’Attitudes Toward
AI in Marketing80%
AI marketing will
revolutionize themarketer’s role79%
Changes the role ofmarketing toward
more strategic work

Source: Emarsys

86%
86%

Makes marketing teams
more effective

Makes marketing
teams more efficient82%
Allows marketing staff
to focus on valuegenerating tasks as AI
automates workflows

Marketers are especially
excited about what AI can dofor them. 80% of surveyed
marketers say AI will
revolutionize their role.
41

Areas Marketing
Leaders Believe
AI Can Help Them

60% marketing leaders alreadybelieve AI can help them run
more effective programmatic
campaigns. We agree, which is
why we put machine learningat the center of our new DSP:
the AppNexus Programmable
Platform (APP).
Source: Salesforce

Sentiment analysis
Lead scoring

56%
57%

Customer segmentation/lookalike audience modeling 58%
Productivity of marketers

59%

Hyperpersonalization at scale

59%

Digital asset management

59%

Campaign analytics

59%

Business insights across data and systems

59%

Predictive journeys

60%

Hyperpersonalized product recommendations

60%

Programmatic advertising and media buying

60%

Hyperpersonalization of content

61%

Dynamic landing pages and websites

61%

Delivering the right message, on the right channel, at the right time

61%
42

Header
Bidding43

Percent of Top 1,000 U.S.
Web Sites Using Header
Bidding, January 201827%

Do notuse header
bidding

The vast majority of the mostpopular, programmatic adsupported sites on the internet
have adopted header bidding.

Source: ServerBid Header Bidding Industry Index. Note on methodology: ServerBid tracks header
bidding usage among the top 1,000 sites using programmatic advertising, as ranked by Alexa.com.

73%
Use header
bidding44

Header Bidding Sites
in Top 1,000 by Type ofWrapper, January 2018

Right now, more than halfof header bidding adopters
are only using a client-sidewrapper. But server-side header
bidding can help publishers add
more demand partners without
increasing latency. 7.91% ofheader bidding adopters areusing a server-side wrapper,
while 28.24% are deploying.
Source: ServerBid Header Bidding Industry Index

54.71%
Client-sidewrapper only

No wrapper
Server-sidewrapper

What kind ofwrapper dothe top 1,000
header bidding
sites use?

28.24%
Hybrid wrapper

45

Header Bidding Sites
in Top 1,000 by Type ofWrapper, January 2018
What wrappers are publishers using?

19.70%

Index Exchange

Source: ServerBid Header Bidding Industry Index

19.60%

In-House
Wrapper Built
on Prebid

16.20%

Vendor Wrapper
Built on Prebid

6.80%

Vendor Wrapper(Non-Prebid)

3.40%

In-House
Wrapper(Non-Prebid)46

34.4%
Rubicon

40.6%

33.4%
Criteo

39.1%

32.9%

AppNexus

Index

AmazonOpen X

Sovrn

14.4%
Sonobi

10.1%
Pubmatic

13.1%

8.2%
Facebook

PulsePoint

7.8%
Conversant

12%

7.1%
YieldBot

Source: ServerBid Header Bidding Industry Index

DistrictM

7.1%
RhythmOne

4.5%
bRealTime

6.6%

4.2%
TrustX

TripleLift

3.3%
Kargo

23.9%

We’ve seen firsthand how machine learning can optimize programmatic
campaigns. When Greenhouse Group tested APP’s augmented line itemfeature – which uses machine learning to constantly optimize inventory
selection and bid strategy – against a manual campaign managed by oneof their best traders, they found that APP achieved 13% lower CPCs while
decreasing manual operation time by 73%.

AOL

47.6%

AppNexus is the most widely-adopted
demand partner for header bidding sites,
appearing in 48.6% of header bidding setups
for the top 1,000 sites.

48.6%

Top 20 Header Bidding
Demand Partners

47

Duopoly48

Duopoly vs. All Publishers:
Estimated Share of Total
U.S. Digital Ad Revenue
Duopoly (Facebook and Google)
Other

45.30%

54.70%

41.60%

58.40%

36.90%

34.20%

32.40%

63.10%

65.80%

67.60%

2017

2018

Facebook and Google
took up a whopping 63.1%
of U.S. digital ad revenue
in 2017, and their share is
projected to grow further
in the next two years.
2015
Source: eMarketer

2016

2019
49

Duopoly vs. All Publishers:
Yearly Estimated Digital
Ad Revenue Growth

The concentration has gotten worse
since 2015, when Google and Facebook
began capturing new digital ad revenue
at a much higher rate compared to
publishers and other platforms.

Duopoly (Facebook and Google)
Other

31.80%
27.80%
25.30%

20.80%
18.20%

19.20%

17.70%
15.60%

12.40%

14.70%
10.60%

9.00%

9.90%
6.50%
2.80%

2012

Source: eMarketer

2013

2014

2015

2016

2017

4.80%
2018

2019

50

Duopoly vs. All Other
Publishers: EstimatedShare of U.S. Mobile
Ad Revenue

Other

41.50%

Duopoly(Facebook & Google)

58.50%
Source: eMarketer

The duopoly captures alower – but still a clear
majority – share of mobile
ad revenue as well. In 2018,that share is expected tojump from 58.5% to 60.9%.
51Where Digital Video
Ad Revenue is Going,
According to Senior
U.S. Marketers

9.1%
OTT

24.7%
Mobile

The issue persists in video as
well. Between Facebook andYouTube, marketers estimate
the duopoly takes in 66.1% of
all digital video ad revenue.

Source: eMarketer

39%
Facebook

27.10%
YouTube52

Disclaimer
All rights reserved. The information contained in this white paperis believed to be reliable and current as of the date of publication, but
accuracy cannot be guaranteed. Recommendations or forward-looking statements contained in this white paper are based on estimatesof future results at the time of publication and are inherently uncertain. Actual results may vary materially from those expressed or
implied in any such recommendations and forward-looking statements. AppNexus is under no obligation to, and expressly disclaims any
obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.
53

U.S. Display Ad
Click-ThroughRates by Format

0.08%
Custom
In-Page

0.07%
0.08%
Enhanced
Banner

Image

0.06%
Rich Media

Source: eMarketer

0.05%
Flash In-Page

0.03%
HTML Banner

Enhanced banner andcustom in-page ads
attract the most clicks inthe display category.
54