eMarketer is projecting US retail advertising spending on paid digital media to climb to $9.42 billion in 2013. By 2017, retail digital ad spending is expected to reach $13.5 billion. This represents a compound annual growth rate (CAGR) of 10.5%.
The retail industry continues to lead US digital ad spending and is expected to retain its dominance through 2017. eMarketer projects the retail industry to capture 22.3% of the total US digital advertising pie in 2013. The retail sector’s share is expected to decline slightly by 2017 to 22.0%. The retail industry is followed by the financial services industry (12.4%), automotive (12.1%), telecom (11.4%), and consumer package goods (8.3%) to round out the top five spending industries in 2013.
The retail industry continues to look to direct-response advertising for the majority of its digital ad spending. 
In 2013, 64.6% of paid digital dollars will be invested in direct-response efforts. The remaining 35.4% will be directed at brand focused advertising initiatives.
More retailers are looking to mobile and local marketing as they attempt to stay in front of consumers who are focused on smartphone and tablet devices. Mobile, local and social marketing also presents unique opportunities for retailers to build relationships with consumers across multiple screens and platforms.
With the focus on direct response advertising, the importance of Search Engine Marketing (SEM) becomes even more clear. While retailers were once able to rely on SEO and paid search to drive traffic, they must now have a clear and effective SEM strategy to compete with the manufacturers of the products they sell.
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