Online Advertising Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Online Advertising Market is Segmented by Ad Format (Social Media, Search Engine, and Video), Platform (Mobile, Desktop, and Laptop), End-user Vertical (Automotive, Healthcare, and Retail), and Geography.

Market Snapshot

Online Advertising Market Overview
Study Period: 2019- 2026
Base Year: 2020
Fastest Growing Market: North America
Largest Market: North America
CAGR: 14.3 %
Online Advertising Market Key Players

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Market Overview

The Online Advertising Market is expected to grow at a CAGR of 14.3% over the forecast period (2021 - 2026). The Covid-19 pandemic had a positive effect on the Online Advertising Market. The pandemic leads to lockdowns and works from home scenarios; People are not getting out of their houses, which leads to the growth of the online advertising market. People became more attracted onwards online portals and social networking sites, which resulted in increased online population and streaming.

  • The COVID-19 pandemic is having a significant impact on various industries, and digital advertising is not an exception. With the COVID-19 pandemic, business owners assess their marketing efforts and wonder if it is the best time to run online ads.
  • For instance, According to a report by the Interactive Advertising Bureau, almost 24% of media buyers, planners, and brands paused ad spending until Q2 2020. While nearly 46% indicated, they would adjust their ad spending across the same period.
  • As most end users are now operating online with digital gadgets and uncertainty of pandemic to end, many organizations are planning to shift their advertising investment to digital platforms.
  • The increasing technological advancements coupled with increasing digital spending by enterprises is expected to drive the online advertisement market over the forecast period.
  • Over the years, technological developments regarding the internet, combined with its increasing commercial use and the rapidly growing number of internet users worldwide, have not only shaped the evolution of online advertising and produced different forms of digital advertising but have also given rise to new advertising business models and new market levels and players.
  • Additionally, there are different types of advertisements for mobile devices, including click to download, click to call, image text, and banner ads. Moreover, consumers widely prefer smartphone devices over laptops or desktops, owing to convenience and portability. Similar operations can be performed on the former, owing to which mobile platforms are expected to grow lucratively.
  • Moreover, the 6-second ad is increasingly gaining popularity on various social media platforms. According to new research by the Advertising Research Foundation, short-form, six-second ads on TV capture 8% to 11% more attention per second than longer ads.

Scope of the Report

Online advertising is a marketing strategy adopted by various organizations, which involves the use of the internet as a medium to obtain website traffic, and target and deliver marketing messages to the right customers.

The scope of the study is currently focused on Global Online advertising. The study tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry. The study also tracks the impact of COVID-19 on the overall Online advertising Market and its performance. Detailed estimates for the next five years are included, along with the study of the major players and their strategies.

Format
Social Media
Search Engine
Video
Email
Other Advertising Formats
Platform
Mobile
Desktop and Laptop
Other Platforms
End-user Industry
Automotive
Retail
Healthcare
BFSI
Telecom
Other End-user Verticals
Geography
North America
US
Canada
Europe
UK
Germany
France
Spain
Italy
Netherlands
Poland
Rest of Europe
Asia Pacific
China
Japan
South Korea
India
Rest of Asia Pacific
Latin America
Middle East and Africa

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Key Market Trends

Video Format to Witness High Growth

  • With the introduction of new platforms and formats, the possibilities of video marketing are expanding. While spending on traditional television advertising is declining, digital video market spending is increasing.
  • According to the Interactive Advertising Bureau (IAB), most of the expenses are allocated to mobile and desktop advertising, amounting to almost two-thirds of the total advertising budget for video ads.
  • Wyzowl’s study in the field of video marketing shows that digital video is one of the main trends of 2020. Moreover, video ads capture the attention of the audience better than any other type of ad.
  • According to Videology, a video advertising platform, it was found that 46% of the digital video ads viewed were in the length of 15 seconds. Additionally, the share of the cross-screen in the number of digital video ad campaigns in the United States was 98%.
  • Moreover, FreeWheel, A Comcast Company, a provider of comprehensive ad platforms, Entertainment and Media, and Consumer packaged goods, accounted for 19% and 15% of video ad views.
Online Advertising Market Key Trends

North America Occupies the Largest Market Share

  • Rapidly increasing investments associated with digital ads, particularly online advertisements, are expected to drive the growth of the market studied in North America. Also, the region is highly aware and mature in terms of smartphones and online activity, which creates many opportunities for advertisers.
  • Additionally, the United States has a strong foothold of online advertising vendors, which contributes to the growth of the market. Some of them include Google Inc., Microsoft Corporation, Twitter, Inc., and Amazon.com.
  • In July 2020, Google launched new features aimed at helping advertisers using the company's services to make their products stand out in web search results and on other platforms.
  • One of the new features from the company lets Google Search users configure their ads in a manner that has Google fetch relevant images from the advertiser's online materials and include those images within search results.
  • Advertisers in the cryptocurrency industry recently faced a throughout ban from Google to advertise their platform. However, with the increasing applications of diverse cryptocurrencies in several industries and associated regulations, Google reversed the ban on cryptocurrency-related advertising in the United States in the recent past.
Online Advertising Market Growth by Region

Competitive Landscape

The online advertising market is highly competitive, owing to the presence of many large players in the market operating on a global scale. The market appears to be moderately concentrated, with major players adopting key strategies like mergers, acquisitions, and service innovation. Some of the major players in the market are Google LLC, Facebook Inc., and Twitter Inc.

  • October 2020 - Microsoft Advertising introduced multi-factor authentication in Microsoft Advertising online. The company is now extending the rollout of multi-factor authentication to all users who sign in through a third-party application that uses the Microsoft Advertising API.

Recent Developments

  • February 2021- D.A.Consortium Inc. announced that it had been newly certified as Sportify Advertising Partner by Spotify AB. DAC will work directly with Spotify to sell reservations based ads through its DSP MarketOne.
  • September 2021 - Facebook advertisements are helping companies in retail, manufacturing, wholesale, groceries, consumer packaged goods, and other verticals to sell more, operate more efficiently, scale seamlessly and deliver remarkable customer experience. Facebook collaborated with Stanley Black & Decker, L'Oreal and Motorola.
  • September 2021 - New attributes from Microsoft Advertising allow businesses to indicate their dedication to “responsibility, how the brand values align with the values of the customers, and how the brand is being inclusive,” “Marketing with Purpose Business Attributes allows to communicate quickly and easily how the brand is ‘for someone like me.’ They allow the brand to be authentic, which is the key attribute to building trust with customers. This initiative is exclusive to Microsoft Advertising and follows the lead the company has taken with its Marketing with Purpose playbook and course. The idea behind the initiative is to build a brand that’s welcomed into people’s lives by earning genuine trust, upholding their values, and inclusively advertising.
  • May 2021- The Advertising Standards Council of India (ASCI) has appointed infectious advertising, an independent and integrated agency, as their creative partner. Infectious advertising will provide ATL, BTL, and digital creative services to ASCI and strategic support for campaign developments and audience outreach programs.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Impact of COVID-19 on the Online Advertising Industry

      1. 4.2.1 The shift from traditional advertising to digital medium has witnessed considerable growth

      2. 4.2.2 Overall ad spending across major categories to witness a decline in 2020 due to falling revenues

      3. 4.2.3 Organizations looking at targeted advertising as a means to optimize spending

      4. 4.2.4 Impact of changing digital consumption behavior on the online advertising industry

    3. 4.3 Market Drivers

      1. 4.3.1 Ongoing shift from Traditional to Online Advertising

      2. 4.3.2 Increasing Use of Mobile Devices and consumption of digital content

      3. 4.3.3 Emergence of novel advertising techniques coupled with growing trend of mobile apps-based advertising

    4. 4.4 Market Restraints

      1. 4.4.1 Operational complexities and concerns over effectiveness of communication in mature end-user industries due to presence of incumbents

    5. 4.5 Value Chain Analysis

    6. 4.6 Industry Attractiveness- Porters Five Forces Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitute Products

      5. 4.6.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Format

      1. 5.1.1 Social Media

      2. 5.1.2 Search Engine

      3. 5.1.3 Video

      4. 5.1.4 Email

      5. 5.1.5 Other Advertising Formats

    2. 5.2 Platform

      1. 5.2.1 Mobile

      2. 5.2.2 Desktop and Laptop

      3. 5.2.3 Other Platforms

    3. 5.3 End-user Industry

      1. 5.3.1 Automotive

      2. 5.3.2 Retail

      3. 5.3.3 Healthcare

      4. 5.3.4 BFSI

      5. 5.3.5 Telecom

      6. 5.3.6 Other End-user Verticals

    4. 5.4 Geography

      1. 5.4.1 North America

        1. 5.4.1.1 US

        2. 5.4.1.2 Canada

      2. 5.4.2 Europe

        1. 5.4.2.1 UK

        2. 5.4.2.2 Germany

        3. 5.4.2.3 France

        4. 5.4.2.4 Spain

        5. 5.4.2.5 Italy

        6. 5.4.2.6 Netherlands

        7. 5.4.2.7 Poland

        8. 5.4.2.8 Rest of Europe

      3. 5.4.3 Asia Pacific

        1. 5.4.3.1 China

        2. 5.4.3.2 Japan

        3. 5.4.3.3 South Korea

        4. 5.4.3.4 India

        5. 5.4.3.5 Rest of Asia Pacific

      4. 5.4.4 Latin America

      5. 5.4.5 Middle East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Google LLC

      2. 6.1.2 Facebook, Inc

      3. 6.1.3 Microsoft Corporation

      4. 6.1.4 Twitter Inc.

      5. 6.1.5 Adobe Systems Inc.

      6. 6.1.6 Baidu, Inc.

      7. 6.1.7 Yahoo Inc.

      8. 6.1.8 IAC/InterActiveCorp

      9. 6.1.9 Amazon.com, Inc

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. FUTURE OF THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Online Advertising Market market is studied from 2019 - 2026.

The Online Advertising Market is growing at a CAGR of 14.3% over the next 5 years.

North America is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Google LLC, Facebook Inc., Twitter Inc., Amazon.com Inc., Microsoft Corporation are the major companies operating in Online Advertising Market.

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