Online Advertising Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Online Advertising Market Analysis

The Online Advertising Market is expected to grow at a CAGR of 14.3% over the forecast period (2022 - 2027). 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 digital advertising but have also given rise to new advertising business models, new market levels, and players. Moreover, the increasing technological advancements coupled with increasing digital spending by enterprises are expected to drive the online advertisement market over the forecast period.

• With over 3.5 billion search queries on Google, every day paid search, where Google or other search engines are paid to advertise content on SERPs (search engine results pages) for relevant keywords, is one of the most popular and effective types of online advertising. Industries that have been spending mostly on pay-per-click were retail, education, publishing, and travel. According to PowerTraffick, when it comes to pay-per-click investment on internet ads, businesses usually make double what they spend on Google ads. According to Google, search ads increase brand awareness by 80%. Additionally, 75% of people who find local, helpful information in search results are more likely to visit the physical store.
• Moreover, AI-powered Optimization in advertising is increasing as the impact of advertising can be instantly gauged in online mode. The AI-powered tool can self-train to write blogs and update content. For instance, for content creation, Jarvis is an example of AI-powered software trained to generate original, creative content.
• Additionally, there are different 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.
• On the contrary, the presence of ad blockers aimed at eliminating advertisements from users’ web pages might limit the growth of the global market for online advertising. Moreover, several companies are grappling with the problem of transitioning from desktop to smartphone ads. This might also impede market expansion.
• The COVID-19 epidemic had a favorable impact on the market for online advertising. Lockdowns and work-from-home situations brought on by the epidemic fueled the expansion of the web advertising industry. Online portals and social networking sites drew more users, which led to a surge in online activity and streaming. Business owners review their marketing strategies in light of the COVID-19 pandemic and question whether now is the right time to post internet advertisements. As an illustration, approximately 24% of media buyers, planners, and companies halted ad expenditure until Q2 2020, according to a research from the Interactive Advertising Bureau. Nearly 46% of respondents also said they would change their ad spending within the same time period.

Online Advertising Industry Segments

Online advertising is a marketing strategy adopted by various organizations, which involves using the internet as a medium to obtain website traffic, 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.

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

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Online Advertising Market Trends

This section covers the major market trends shaping the Online Advertising Market according to our research experts:

Increasing Use of Mobile Devices and consumption of digital content

• Digital advertising and mobile marketing are the new age marketing techniques that would drive businesses and integrate them into the Industrial Revolution 4.0. With a large number of SMEs shifting to online sales, increasing smartphone users, and a lack of on-ground events or exhibitions in the near future, it would provide the necessary advertising channels and prove to deliver a positive impact on the Online Advertising Market in due course of time.
• Paid search enables companies to track the conversion, level of engagement, and click-through rate and track the return on investment (ROI) of a campaign to make adjustments. It is a flexible tool and a perfect one for this volatile market. In 2021, Facebook earned over 114 billion U.S. dollars in digital revenue through online advertising. During the same period of time, search market leader Google generated 209.5 billion U.S. dollars through digital advertising channels.
• The marketing and advertising spend of companies are already shifting from the offline to the online space. Paid search is emerging as a great option for organizations for its cost-effectiveness and ability to adjust campaigns as and when needed. It is proving beneficial for both B2C and B2B segments. According to Zenith, in 2022, the total mobile advertising spending is projected to reach a record of 327.1 billion U.S. dollars worldwide. This figure marked an increase of 17.2 percent compared to the previous year, and according to the latest data, spending will amount to nearly 399.6 billion by 2024.
• However, going forward, the shift of advertising budget from traditional marketing like print, and ATL-outdoor activities to digital and mobile marketing, would witness a rise with end-users preferring to consume content primarily on their mobile phones or TV, and social distancing, work-from-home possibly becoming the new normal. In other words, it is the means to reach the end-user who is consuming content primarily on the laptop, smartphone, or TV. Ad spending on the news, social chatting platforms, streaming TV, music, and games is increasing in the current period. Thus, a shift in the advertising budget from traditional marketing to digital and mobile marketing is expected.
• For instance, as per FICCI, as of 2021, the revenue generated by digital advertising across India was valued at around 246 billion Indian rupees. That same year, India’s total advertising revenue was over 700 billion Indian rupees, and the country was ranked among the largest advertising markets across the world in terms of ad spending.

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