Businesses are paying about 50% more for online sales than they did just a few years ago.
Here’s what we know.
Business costco/GettyImagesBusinesses are spending more on online sales for two reasons: 1) They are spending a larger percentage of their sales on those online ads, and 2) They’re paying more to get those online sales through.
The number of businesses paying more on average for online services jumped more than 20% last year, according to a report by business consultancy PricewaterhouseCoopers.
This means businesses are getting more money to spend on online advertising.
But, as the data shows, not all businesses are seeing this increase in online spending.
The majority of businesses are still spending a small amount online, which is the opposite of the growth trend of 2016.
And what about online ads?
Pricewaterhouses research found that the share of online ads spent on mobile devices fell from 46% in 2016 to 41% in 2017.
So the trend of more online ads on mobile is still present, even if it is declining.
“Mobile ads have traditionally been a key source of revenue for many of the large US retailers, but they are not showing any signs of reversing their declines in 2017,” said Nick Weidman, research director at Pricewaterfirms.
Online ads are also not the only source of money for businesses.
Retailers are also spending more money on advertising in the form of promotions, according the report.
“We estimate that the advertising market is expected to generate about $30 billion to $40 billion in revenue in 2018 and 2019, representing about 17% of total US retail spending,” Weidmans report said.
So what’s the takeaway from all of this?
Retailers need to invest more in their online advertising programs and they should pay more for it.
The companies that are paying the most online advertising spend the most.
That means they should also pay more on top of that to keep the online advertising revenue flowing.