Market Scenario
Global internet advertising market is expected to grow from US$ 476.46 billion in 2022 to US$ 4,678.12 billion by 2031, at a CAGR of 29.9% during the forecast period 2023-2031.
The growth in the market is driven by factors such as the increasing use of smartphones, high-speed internet, and time spent online. The industry is making rapid technological advancements in advertising to reduce costs and improve efficiency, including the use of machine learning, artificial intelligence, augmented reality, voice-based systems, and virtual reality.
According to the Interactive Advertising Bureau, 20% of digital advertising is conducted through machine-to-machine interaction, and that number is rapidly increasing. Automated advertising offers efficiency, scale, and low costs, and major platforms like Google and Facebook are adopting these technologies. The growth of social media, increasing digital media advertising spending across industries, and the rise of streaming platforms are also contributing to the overall internet advertising market growth.
The increased use of smartphones has led companies to develop smartphone advertising solutions, and according to a report by Internet Advertising Revenue, 65.1% of advertising revenue in 2022 was generated from smartphone advertising, with a 28% increase between 2021 and 2022.
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Market Dynamics
The growth of the global internet advertising market has been fueled by a number of factors, including the increasing popularity of social media and the availability of advanced, automated advertising platforms. With the rise of social media, businesses have found that sponsored content and ads can be an effective way to reach their target audiences and promote their brands. This is particularly true in countries like Japan, where social media penetration is high and the average time spent on these platforms has increased, particularly due to the Covid-19 pandemic.
In Japan, social media platforms account for over 50% of the increasing digital marketing activities, and the country has seen a sharp rise in the number of social media influencers in recent years. Brands are starting to shift away from relying on celebrity endorsements and instead turn to social media influencers as a way to reach small communities and drive business growth. The growth of the global internet advertising market is expected to continue, driven by these and other trends in the industry.
Segmental Analysis
The global internet advertising market can be analyzed based on various segments, including:
By Platform:
The mobile platform with 54% market share continues to dominate the internet advertising market due to the increasing usage of smartphones and tablets. The rise of mobile commerce and the widespread availability of mobile internet have further fueled the growth of mobile advertising. Advertisers are shifting their focus to mobile advertising as consumers are spending more time on their mobile devices, leading to a higher likelihood of engagement with mobile ads. The mobile platform offers unique opportunities for targeted and personalized advertising, making it an attractive option for advertisers. The growth of mobile advertising is expected to continue in the coming years, driving the overall growth of the internet advertising market.
By Advertising Model:
The cost per thousand (CPM) model is one of the the most widely used advertising models with over 33% market share in the internet advertising market, due to its ability to reach a large audience at a relatively low cost. Advertisers pay a fee for every thousand impressions their ad receives. This model is suitable for brand building and awareness campaigns.
The cost per click (CPC) model, on the other hand, charges advertisers only when a user clicks on their ad. This model is more suited for direct response campaigns where the advertiser wants to drive traffic to their website or conversion. The cost per action (CPA) model charges advertisers only when a specific action, such as a purchase or sign-up, is completed by a user. This model is often used for performance-based campaigns where the advertiser only wants to pay for the results they receive.
By Ad Format:
This segmentation of the global internet advertising market includes display ads, search ads, video ads, and social media ads. Display ads are the most commonly used, with search ads being the second most popular. It's estimated that the search ads segment is set to grow rapidly and is projected to generate over 44% of the total market revenue by 2031. This growth can be attributed to the increasing number of internet users and the rising popularity of search engines as the go-to source for information and product discovery.
Moreover, advancements in technology and the increasing use of mobile devices have also contributed to the growth of search ads. With the growing number of people using voice search, search engines are also optimizing their ads to provide a more conversational experience, further driving the growth of the search ads segment.
By Enterprise Size:
The internet advertising market caters to a diverse range of businesses, including small, medium, and large enterprises. Among these, small and medium-sized enterprises (SMEs) are the second and third largest consumers of internet advertising. This can be attributed to the need for cost-effective advertising solutions that help SMEs reach their target audience in a cost-efficient manner.
SMEs often have limited budgets for advertising and need to maximize the impact of their advertising spend. Internet advertising provides them with the opportunity to reach a large audience at a relatively low cost, compared to traditional advertising methods. Furthermore, the availability of targeted advertising solutions and the ability to track the success of their advertising campaigns makes internet advertising even more appealing to SMEs.
In comparison, large enterprises typically have larger budgets for advertising and can afford to invest in more extensive and sophisticated advertising campaigns. However, the increasing popularity of internet advertising among SMEs is driving growth in this segment in the internet advertising market, as more and more SMEs adopt digital marketing strategies to reach their target audience.
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By Industry Verticals:
The ad industry serves a wide range of industries, including retail, banking, financial services, and insurance (BFSI), healthcare, information technology and telecommunications (IT & telecom), and media and entertainment, among others.
Among these, the retail industry is the second largest consumer of internet advertising market, as retailers seek to reach their target audience effectively and efficiently. The BFSI industry is the second-largest consumer, as financial services and insurance companies look to attract and retain customers through targeted online advertising.
The media and entertainment industry is also a significant contributor to the online advertising market, with projections estimating that it will generate over 26% of the total revenue by 2031. The growth in this segment can be attributed to the increasing popularity of online streaming services and the need for media companies to reach their target audience effectively through online advertising.
Regional Analysis
The ad industry is a global market, with different regions showing varying levels of growth and demand for internet advertising market.
Asia Pacific is one of the fastest-growing regions in terms of internet advertising, driven by the rapid growth of digital economies in countries such as China, India, and Indonesia. The region has a large and growing population of internet users, providing a significant opportunity for advertisers to reach their target audience. Furthermore, the increasing adoption of mobile devices and the growth of e-commerce are also contributing to the growth of the internet advertising market in the APAC region.
Europe, on the other hand, is a mature market, with a high penetration of internet users and a strong tradition of online advertising. The region is home to some of the world's largest advertisers, and the market is characterized by intense competition and a focus on innovation. The EU has also implemented strict data privacy regulations, such as the General Data Protection Regulation (GDPR), which has had a significant impact on the internet advertising market in Europe.
Competitive Landscape
The profiled companies include Adobe Systems Inc., Alibaba Group Holdings Limited, Amazon Web Services, Inc., Baidu, Inc., Facebook, Inc., Google LLC, Hulu LLC, International Business Machines Corporation, Microsoft Corporation, Twitter Inc., Verizon Communication Inc., and other prominent players in the internet advertising market.
In addition to the company profiling, the competitive landscape section also provides an analysis of the shareholding of top vendors in the global market, enabling readers to understand the trends in product development and shifts in consumer preferences. This information can be used by companies operating in the market to formulate effective business strategies and stay ahead of their competitors. The section also provides an overview of the market structure, with a focus on market concentration, key players and their market share, and the impact of COVID-19 on the market.
List of Key Companies Profiled:
Segmentation Overview of the Global Internet Advertising Market
By Platform
By Advertising Model
By Ad Format
By Enterprise Size
By Ad- Type
By Industry Verticals
| Report Attribute | Details |
|---|---|
| Market Size Value in 2022 | US $476.46 Bn |
| Expected Revenue in 2031 | US $4,678.12 Bn |
| Historic Data | 2018-2022 |
| Base Year | 2022 |
| Forecast Period | 2022-2031 |
| Unit | Value (USD Bn) |
| CAGR | 29.9% |
| Segments covered | By Platform, Advertising Model, Ad Format, Enterprise, Ad-Type, Industry Verticals, and Region |
| Key Companies | Adobe Systems Inc., Alibaba Group Holdings Limited, Amazon Web Services, Inc., Baidu, Inc., Facebook, Inc., Google LLC, Hulu LLC, International Business Machines Corporation, Microsoft Corporation, Twitter Inc., Verizon Communication Inc., Other Prominent Players |
| Customization Scope | Get your customized report as per your preference. Ask for customization |
Internet advertising is also known as online advertising, web advertising and digital advertising (Digitals Ads). Internet advertising is used to advertise products and services through various digital means such as email, social media, blogging and website. Different types of internet advertising are display advertising, mobile advertising, search engine advertisement, social media advertisement, hybrid and others.
The rapid growth in usage of mobile phones across the world, changing customer behavior, technological advancements in the form of automated advertising platforms are some of the key reasons supporting the continuous surpassing of spending on digital ads over traditional ads.
The Global Internet Advertising Market is growing at a CAGR of 29.9% over the forecast period 2023-2031.
This report provides analysis of the global internet advertising market for 2018-2031, wherein 2018-2022 represent historic data, 2022 has been considered as base year and is on actuals,, while 2023-2031 is forecast period, reflecting impact of different factors on the growth trend.
The increased number of social media users is expected to drive the online advertising market. According to the Internet Advertising Bureau (IAB), social media advertising accounted for about 28% of the total internet advertising revenue in 2019.
The factors like rising adoption of ad-blockers by internet users and the governance of online space by stringent laws and regulations somewhat impede the growth of market.
Asia Pacific is growing at the highest CAGR of about 27% over 2023- 2031.
North America has the largest share of more than 40%.
The report covers the following segments; platform, advertising model, ad format, ad type, enterprise size and industry vertical.
Google LLC, Facebook, Inc., Alibaba Group, Amazon Web Services, Inc. and Baidu, Inc. are the major companies operating in Internet Advertising Market.
The key strategies adopted by market players include Mergers and acquisitions, partnerships, regional expansion, and new product development.
In the first half of 2020, Covid-19 had a significant impact on the digital advertising environment. Many advertisers have put their ad campaigns on hold or have decreased their marketing spending. However, during the pandemic, the surge in the number of digitally connected consumers generated growth potential in the digital advertising business.
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