Digital Advertising Market Size, Share & Trends Analysis Report By Platform (Computer, Smartphone), By Format (Text, Image, Video), By Offering, By Type, By End-user, By Region, And Segment Forecasts, 2023 - 2030

Digital Advertising Market Size & Trends

The global digital advertising market size was valued at USD 365.37 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 15.5% from 2023 to 2030. The considerable growth is attributed to the growing internet penetration coupled with increased expenditure on advertisements by businesses to reach their target customers.  Moreover, the growing prominence of social media platforms, such as Facebook (Meta), LinkedIn Corporation, Twitter (X Corp.), Instagram (Meta), Snapchat (Snap Inc.), Pinterest, TikTok, and YouTube, for branding and engaging with customers is transforming the outlook of the market.

The growth of the market is being further driven by the integration of technologies, such as Artificial Intelligence (AI), analytics, and machine learning. For instance, generative AI enables advertisers to analyze large amounts of data at a minimum, which helps them gain insights into consumer preferences and behavior patterns. This, in turn, allows them to create customized advertisements for their target audience, leading to a higher conversion rate. Besides, this technology also strengthens the recommendation systems that analyze customer data and give personalized suggestions to increase engagement.

Several market players are focusing on launching advertisement tools powered by generative AI to cater to businesses seeking technologically advanced solutions to market their offerings.  For instance, in November 2023, Google LLC introduced new generative AI tools that will allow advertisers to use text-to-image AI capabilities to create new product imagery for free. This feature can be used for changing the background color in the product images or for something more advanced, such as requesting a product to be shown in a scene. Such developments will positively influence the statistics of the market in the coming years.

Platform Insights

The smartphone segment accounted for the largest revenue share of nearly 44.0% in 2022 owing to the significant growth opportunities offered by this platform. The increasing internet and smartphone penetration, coupled with increased usage of social media for advertising, is driving the segmental growth. Moreover, increasing consumption of video content on smartphones, especially through social media platforms such as Instagram, YouTube, and TikTok, is expected to create significant growth opportunities for the market over the forecast period.

The computer segment is anticipated to grow at a CAGR of around 12.1% from 2023 to 2030. Computers are suitable for more conventional settings and offer a high-quality, unhindered, and consistent experience to the users. Several consumers prefer browsing content and products from a desktop as they are more responsive and convenient. Businesses are increasingly focusing on reaching and engaging with users on computers through websites and applications optimized for larger screens, which are positively influencing the market. Moreover, computer users engage in longer sessions, enabling deeper content consumption and increased engagement, which is positively influencing the market.

Offering Insights

The services segment registered growth at the highest CAGR of more than 17.0% as several businesses opted for digital advertising services to run their campaigns effectively. These service providers are experts in content creation, social media advertising, Search Engine Optimization (SEO), Pay-Per-Click (PPC) advertising, etc., which help businesses create brand awareness and effectively engage customers. For instance, digital advertising company WebFX provides PPC management services, enterprise PPC management services, social media advertising, programmatic advertising services, OTT and connected TV services, etc. The growing significance of these services among various industries is expected to contribute to segmental growth further in the coming years.

Format Insights

The video segment is anticipated to dominate the global market in 2022, growing at the highest CAGR of more than 17.0% from 2023 to 2030, owing to the significant impact of this ad format on the audience. Several businesses are inclined to use captivating video advertisements to create brand awareness through various media, especially social media platforms like YouTube, Instagram, Facebook, and TikTok. Short video ads consisting of how-to guides and customer testimonials help companies position their product in the market. Besides, video ads have a wider reach and offer greater chances of reaching the target audience, which attracts consumers and quickens purchasing decisions.

The text segment accounted for is anticipated to showcase growth at a CAGR of exceeding 16% owing to increased adoption of this advertising format by businesses to promote their brand, products, services, or messages. These ads are easier to launch as they require only copy and links to landing pages or current web pages, without the need for graphic design or managing images. Moreover, they translate well on desktop as well as mobile, ensuring that the advertisements reach a wider audience, irrespective of the device they use. Such advantages associated with this ad format will contribute to segmental growth over the coming years.

Type Insights

The search advertising segment dominated the global market in 2022. Search advertising allows businesses to track their campaigns, success rate, and users clicking on the ads. These capabilities help them plan new campaigns and decide upon the keywords to be included in their ads. Various search engines enable advertisers to target specific details about their audience, such as age, gender, and location, which helps create very specific ads for them. These advantages associated with this mode of digital advertising are contributing to segmental growth.

The interstitial advertising segment is expected to grow at the highest CAGR of over 16.0% from 2023 to 2030. These are full-screen advertisements appearing at the natural transition points in an app, such as after completing a task or between activities. They contribute to higher click-through rates through their unique, eye-catching format that captures customers’ attention and prompts them to act. The high click-through rates, in turn, lead to a greater conversion rate, which is driving the demand for interstitial advertising and impelling segmental growth.

End-user Insights

The retail segment accounted for the largest market in 2022 and is projected to dominate the market over the forecast period. This is attributed to an increase in the usage of digital channels, including websites, search engines, social media, email, etc., by retailers to promote offerings and reach customers. These channels help them connect with a larger target audience, personalize their communications, and increase customer engagement. For instance, in August 2023, Walmart expanded its digital advertising offering across its stores. As a part of this initiative, the company displays customers' targeted ads from third parties on screens in self-checkout lanes. It enables the brands to select specific stores or regions wherein they intend to promote their campaigns.

The education segment is anticipated to grow at the highest CAGR of nearly 18.0% from 2023 to 2030, with the rising significance of digital advertising among educational institutions to strengthen their online presence, increase their reach, and enroll students. Besides, increasing usage of social media platforms for promoting education business coupled with a growing proclivity for online learning and distance education is also creating ample growth opportunities for the market. For instance, in May 2023, Endeavor and Harvard University launched an online professional development learning platform named Versity. Such developments will impel the demand for digital advertising solutions in this sector, thereby driving segmental growth over the forecast period.

Regional Insights

North America dominated the global market in 2022 with a revenue share of more than 32%, owing to relatively higher smartphone usage in the region. Besides, the growing popularity of mobile streaming services, including Hulu, Amazon Prime, Netflix, etc. is also creating lucrative opportunities for market expansion in the region. In addition, factors such as increasing demand for e-commerce platforms, considerable rise in online shopping, and the ability of digital advertisement solutions to offer enhanced shopping experience are expected to drive the growth of the regional market over the forecast period.

Asia Pacific is expected to record a CAGR of 17.3% from 2023 to 2030 with the rising demand for smartphones and increasing internet penetration in the region, especially across China, India, and Japan. In addition, the ongoing proliferation of social media platforms and the increased inclination of businesses to collaborate with influencers to create brand awareness is also favoring the market growth in the region. The growth of the market is being further driven by the presence of some of the leading players, such as Baidu, Inc., Tencent Holdings, Ltd., and Alibaba.com, which have an ecosystem with user-friendly mobile applications and payment services.  

Key Companies & Market Share Insights

The companies operating in the digital advertising market are focusing on forming strategic alliances and launching new products to strengthen their foothold in the competitive business environment. For instance, in September 2023, Microsoft introduced a new video ad solution Video and Connected TV (CTV) ads. This new offering allows advertisers to create online video and CTV ad campaigns on the Microsoft Advertising platform. It expands the possibilities for ad-serving by using audience intelligence to target high-value customers and increase conversions. Such innovative offerings will positively influence the market outlook over the coming years.

Digital Advertising Market Report Scope

Global Digital Advertising Market Report Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global digital advertising market report based on platform, format, offering, type, end-user, and region:

• Platform Outlook (Revenue, USD Billion, 2018 - 2030)

  • Computer

  • Smartphone

  • Others

• Format Outlook (Revenue, USD Billion, 2018 - 2030)

  • Text

  • Image

  • Video

  • Others

• Offering Outlook (Revenue, USD Billion, 2018 - 2030)

  • Solution

  • Services

• Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Search Advertising

  • Banner Advertising

  • Video Advertising

  • Social Media Advertising

  • Native Advertising

  • Interstitial Advertising

• End-user Outlook (Revenue, USD Billion, 2018 - 2030)

  • BFSI

  • Automotive

  • IT & Telecommunication

  • Healthcare

  • Consumer Electronics

  • Retail

  • Media & Entertainment

  • Education

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)

    • Saudi Arabia

    • South Africa