Enjoy complimentary customisation on priority with our Enterprise License!
The ad spending market size is forecast to increase by USD 331.5 billion at a CAGR of 8.51% between 2023 and 2028. The market is experiencing significant growth, driven by several key trends and factors. The rise of ad-exchange platforms has increased efficiency and reach in digital advertising, allowing businesses to target specific audiences more effectively. However, digital ad spending continues to grow, with significant investments in display advertising, print, search advertising, social media, digital video, and programmatic advertising. Additionally, the incorporation of augmented reality (AR) in advertising is revolutionizing the industry, providing immersive experiences for consumers and enhancing brand engagement. However, the high cost of advertising, particularly in digital channels, poses a challenge for smaller businesses and marketers, necessitating strategic budgeting and optimization. Overall, the market is expected to continue its growth trajectory, fueled by advancements in technology and the increasing importance of digital channels in marketing strategies.
The market experienced a Disappointing year in 2020 due to Economic disruptions caused by the pandemic. However, the market is expected to rebound as Digital ad spending continues to grow. Traditional ad spending, including Display advertising, Search advertising, and Media ad spending, still holds a significant Share of market but is facing intense Oligopolistic competition from Digital channels. Consumer shifts towards Social media, Digital video, and Mobile ad spending have intensified Advertising investment from brands. Advertising intensity, measured by Ad spending growth, is a crucial factor in the market's dynamics. The Cost structure varies based on Advertising elasticity, Budgetary methods, and the Brand life-cycle theory. Consumer behavior plays a significant role in Advertising to sales conversion, with Advertising pressure influencing Marginal productivity. The Advertising intensity, Share of market, and Share of voice are essential metrics for brands to monitor in this competitive landscape. The market is expected to penetrate further with the Penetration supercharge provided by emerging economies and innovative advertising technologies.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The digital segment is estimated to witness significant growth during the forecast period. The worldwide market experienced a disappointing year in 2020 due to economic disruptions caused by the pandemic. Total ad spending saw a decline, with digital ad spending being the only category experiencing growth. Consumer shifts towards digital platforms, particularly social media, digital video, and mobile, drove this growth.
Get a glance at the market share of various regions Download the PDF Sample
The digital segment was the largest segment and valued at USD 328.30 billion in 2018. Advertisers increased their investment in digital advertising, including display advertising, search advertising, paid social, and programmatic advertising. Geopolitical tensions and economic uncertainty also influenced media ad spending, with out-of-home, cinema advertising, RTB, radio advertising, and sales volume of brand advertising budgets taking a hit. The case rate system, which aims for optimum sales and maximum profit, was a short-term solution for some advertisers. Hence, such factors are fuelling the growth of the market during the forecast period.
For more insights on the market share of various regions Download PDF Sample now!
APAC is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Another significant region contributing to the market is North America. North America had the highest global digital penetration rate of nearly 90% generating the majority of the advertising revenue in the region. Brands have a greater chance of monetizing their advertisements because of the large target audience and high disposable income of the population. Monetization is likely to increase during the forecast period as consumers are rapidly shifting toward online shopping. The increasing availability of Wi-Fi and mobile Internet connections, such as 4G, and the use of apps and web browsers have given advertisers options to use in-app advertising for effective marketing. In 2023, the US dominated the market in the Americas and accounted for the highest revenue share in the global market, owing to the presence of numerous brand managers and advertising agencies in the country. Hence, such factors are driving the market in North America during the forecast period.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increase in number of ad-exchange platforms is notably driving market growth. The global market is witnessing significant growth, driven by the increasing adoption of ad-exchange platforms and the rise of real-time bidding (RTB) in advertising. Profit-taking brands and investment brands are intensifying their advertising efforts to secure a larger share of voice in the market, leading to increased competition among oligopolistic players.
Moreover, advertising budgets are allocated using various methods, including marginal productivity and brand life-cycle theory, to maximize advertising effectiveness. Consumer behavior plays a crucial role in determining advertising elasticity and cost structure. Thus, such factors are driving the growth of the market during the forecast period.
Incorporation of AR in advertising is the key trend in the market. The advertising industry has seen a significant shift with the integration of augmented reality (AR) technology in marketing campaigns. AR's immersive nature allows brands to showcase product features, functionalities, and unique selling propositions in a captivating manner, enhancing consumer engagement.
Moreover, this trend is particularly popular among profit-driven and investment brands seeking to stand out in the oligopolistic competition. Approximately a quarter of brands are adopting AR, recognizing its potential to boost advertising intensity and share of voice. The use of AR in advertising is influenced by consumer behavior, brand life-cycle theory, and advertising elasticity. Thus, such trends will shape the growth of the market during the forecast period.
High cost of advertising is the major challenge that affects the growth of the market. The market experiences intense competition among profit-seeking and investment brands, leading to a significant advertising intensity. Television advertising remains a popular choice despite its high cost structure due to its potential for high return on investment.
Moreover, advertisers pay for TV ads based on cost per mille (CPM) impressions, with prices varying depending on factors such as city and duration. For instance, local television stations may charge anywhere from USD200 to USD1,500 for a 30-second commercial. The high cost of advertising creates pressure on brand managers to optimize their advertising budgets using budgetary methods. Hence, the above factors will impede the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alphabet Inc: The company offers Ad spending products under the subsidiary Google.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market has faced challenging times in recent years due to economic disruptions and geopolitical tensions. Total ad spending, including traditional and digital and mobile devices, experienced a disappointing year in 2020. Consumer shifts towards digital platforms have accelerated, with sales volume driven by advertisers' increasing brand advertising budgets. Media price inflation, sustainability regulation, and addressable media have become essential considerations for advertisers. Digital advertising, including video advertising, paid social, and programmatic advertising, has shown resilience and rebounded in various markets. Mobile ad spending, media ad spending, and out-of-home advertising have also seen growth in specific regions. Economic uncertainty and media price inflation have led some advertisers to focus on the short-term effect of their advertising investment. The FIFA World Cup and other major events have provided opportunities for advertisers to reach their target audiences. Dentsu International, among other industry leaders, has emphasized the importance of renewable energy and sustainability in advertising expenditure. The case rate system and optimum sales strategies aim for maximum profit while ensuring optimum sales volume. In conclusion, the worldwide market continues to evolve, with digital advertising and sustainability playing increasingly important roles. Advertisers must adapt to consumer shifts, economic uncertainty, and media price inflation to maximize their advertising investment.
Market Scope |
|
Report Coverage |
Details |
Page number |
156 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.51% |
Market growth 2024-2028 |
USD 331.5 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.67 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, Canada, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alphabet Inc., Baidu Inc., Burkhart Advertising Inc., Captivate LLC, Clear Channel Outdoor Holdings Inc., Comcast Corp., Daniel J. Edelman Holdings Inc., Fairway Outdoor LLC, Focus Media Information Technology Co. Ltd., JCDecaux SE, Meta Platforms Inc., Microsoft Corp., Omnicom Group Inc., OUTFRONT Media Inc., Publicis Groupe SA, Stroer SE and Co. KGaA, The Interpublic Group of Companies Inc., Twitter Inc., Verizon Communications Inc., and WPP Plc |
Market dynamics |
Parent market analysis, market report , market forecast , 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 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 market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
Get the report (PDF) sent to your email within minutes.
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.