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The online ad spending market share is expected to increase by USD 241.99 billion from 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 10.98%.
This online ad spending market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers online ad spending market segmentation by platform (mobile devices and desktops) and geography (North America, APAC, Europe, South America, and Middle East and Africa). The online ad spending market report also offers information on several market vendors, including Alphabet Inc., Alibaba Group Holding Ltd., Alliance Data Systems Corp., Amazon.com Inc., Baidu Inc., Dentsu Group Inc., Digital Turbine Inc., Eniro Group AB, GroupM, Hakuhodo DY Media Partners Inc. Co. Ltd., IAC InterActiveCorp, Meta Platforms Inc., Microsoft Corp., Reworld Media, Sohu.com Ltd., SXM Media, Tencent Holdings Ltd., The Interpublic Group of Companies Inc., Twitter Inc., and Verizon Communications Inc. among others.
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The decline in offline ad spending is notably driving the online ad spending market growth, although factors such as click fraud activities may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the online ad spending industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Online Ad Spending Market Driver
The decline in offline ad spending is one of the key drivers supporting the online ad spending market growth. Due to the rising competition from digital avenues such as audio streaming services, spending on radio ads has declined in recent years. However, in 2020, the COVID-19 pandemic led to a further decline in radio ad spending. Due to the lockdowns, fewer people commuted to work, which resulted in reduced daily listenership, which constrained the global radio advertising market. For instance, in the US, the average unit ad rates per 30-second spot on radio networks declined by 18.2% in 2020 compared to 2019. Similarly, in India, radio ad volumes declined in Q1 2020 by 34% compared to the same period in the previous year. In April 2020, the number of brands advertising on radio in the country declined to 650 as compared to 2000 in March 2020. Thus, the decline in offline ad spending will positively impact the growth of the global online ad spending market during the forecast period.
Key Online Ad Spending Market Trend
The growth of online video and connected TV (CTV) advertising is another factor supporting the online ad spending market growth. The spending on online video advertising is expected to increase from $62 billion in 2021 to $91 billion in 2024. Since the outbreak of the COVID-19 pandemic in 2020, consumers have increased the amount of time spent on streaming videos. In view of this, advertisers are increasingly viewing OTT content providers as a profitable advertising platform. In addition, significant investments made by OTT content platforms, such as Netflix, Hotstar, and Amazon Prime, to ensure diversity in content offerings have led to a rise in subscription-based services globally. For instance, Amazon Prime Video's subscriber base stood at 18 million in June 2021 and is projected to reach 21.8 million by 2022. Thus, the overall rise in consumption of OTT content has been favorable for advertisers to increase their reach. Such trends will positively impact the growth of the global online ad spending market during the forecast period.
Key Online Ad Spending Market Challenge
Click fraud activities is one of the factors hindering the online ad spending market growth. With the increasing number of smartphone users, mobile advertising has become one of the fastest-growing segments of online advertising. Many ad publishers are engaged in ad stacking, click injecting, and running background ads on mobile apps. However, this has also increased the amount of in-app click frauds. For instance, in 2020, mobile apps had a share of 19% of all fraudulent clicks. Though not considered a click fraud activity, users can sometimes engage in behavior that could lead to an outcome similar to click fraud. Such instances can occur when a user regularly clicks on a PPC search ad to visit a particular website instead of navigating it directly from a search engine. Thus, click fraud activities can pose a challenge to online advertisers and lead to a decline in their revenues. These challenges are expected to negatively impact the growth of the global online ad spending market during the forecast period.
This online ad spending market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global online ad spending market as a part of the global advertising market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the online ad spending market during the forecast period.
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
This statistical study of the online ad spending market encompasses successful business strategies deployed by the key vendors. The online ad spending market is fragmented and the vendors are deploying organic and inorganic growth strategies to compete in the market.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The online ad spending market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the online ad spending market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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41% of the market's growth will originate from North America during the forecast period. The US is the key market for online ad spending market in North America. Market growth in this region will be faster than the growth of the market in MEA.
The increased penetration of smartphones and strong broadband infrastructure will facilitate the online ad spending market growth in North America over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
In 2020, the COVID-19 pandemic positively impacted the regional online ad spending market. However, factors such as a surge in the adoption of smartphones, tablets, and desktops and the subsequent increase in online ad spending will drive the growth of the regional market during the forecast period.
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The online ad spending market share growth by the mobile devices segment will be significant during the forecast period. Online advertising on mobile devices offers a better return on investment (ROI) than desktop computers. This segment is expected to experience high growth during the forecast period owing to the rising number of smartphone users globally. Mobile Internet advertising can host a variety of advertisements such as mobile videos and in-app advertisements via different platforms, which increase their outreach. With the increasing number of smartphone and tablet users across the world, mobile advertising has become one of the fastest-growing segments of the global online ad spending market. Such factors are driving the market growth.
This report provides an accurate prediction of the contribution of all the segments to the growth of the online ad spending market size and actionable market insights on post COVID-19 impact on each segment.
Digital Marketing Spending market - The market share has the potential to grow by USD 128.83 billion during 2021-2025, and the market's growth momentum will accelerate at a CAGR of 6.53%.
Digital Advertisement Spending market - The market share is expected to increase by USD 523.45 billion from 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 17.47%.
Ad Spending market - The market share is expected to increase by USD 342.32 billion from 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 8.75%
Online Ad Spending Market Scope |
|
Report Coverage |
Details |
Page number |
120 |
Base year |
2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.98% |
Market growth 2022-2026 |
$ 241.99 billion |
Market structure |
Fragmented |
YoY growth (%) |
10.4 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 41% |
Key consumer countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
Key companies profiled |
Alphabet Inc., Alibaba Group Holding Ltd., Alliance Data Systems Corp., Amazon.com Inc., Baidu Inc., Dentsu Group Inc., Digital Turbine Inc., Eniro Group AB, GroupM, Hakuhodo DY Media Partners Inc. Co. Ltd., IAC InterActiveCorp, Meta Platforms Inc., Microsoft Corp., Reworld Media, Sohu.com Ltd., SXM Media, Tencent Holdings Ltd., The Interpublic Group of Companies Inc., Twitter Inc., and Verizon Communications Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Platform
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
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