Global Online Advertising Industry Report

The global online advertising market was valued at $232.7 billion in 2023. It is forecast to grow further at a compound annual growth rate (CAGR) of 9.5% between 2024 and 2032 to reach a value of $538.2 billion.

MARKET SEGMENTATION

By type:

• Native advertising
• Video advertising
• Display advertising
• Full-screen interstitials
• Others

The native advertising segment dominates the market, with a market share of around 25%. Native ads are an effective and popular advertising strategy that seamlessly integrates promotional content into the surrounding content, making them seem to be a natural part of the platform, offering a less intrusive and more cohesive user experience that translates to more engagement.

The full-screen interstitials segment is seeing rapid growth, as these ads offer immersive and attention-grabbing features by taking up the entire screen of a device for an impactful advertising effect.

By Platform:

• Mobile/smartphone
• Laptops
• Desktops & tablets
• Others

The mobile/smartphone segment is expected to continue to dominate the market with a share of around 60%, a number that is continuing to grow with a surging CAGR. This growth is largely due to the rising adoption of smartphones worldwide, creating a huge opportunity for advertisers to reach more audiences via mobile ads.

By end-user:

• Media & entertainment
• Banking, financial services, and insurance (BFSI)
• Education
• Retail & consumer goods
• IT & telecom
• Healthcare
• Others

The retail & consumer goods segment dominates the overall market, demonstrating significant and sustained growth in recent years.

Your Business, Our Expertise – A Winning Combination

MARKET DRIVERS AND TRENDS

The increasing penetration of the Internet and mobile devices drives the market as more consumers use smartphones and other mobile devices, and businesses are allocating more of their marketing budgets to digital channels.

The surging popularity of social media platforms is also driving growth in the sector, as many platforms have become a regular part of consumers' daily lives. This means more opportunities for advertisers to engage with their target audiences with interactive and personalized ads to enhance awareness and shore up brand loyalty.

The increasing adoption of video advertising also drives growth within the online advertising space. Video ads have become hugely popular because of their engaging format and capability to communicate more complex messages. Companies can capture the attention of their audiences more effectively on video-sharing platforms such as YouTube. There is also an increasing consumption of video content on social media platforms.

Technological innovations in data analytics and artificial intelligence (AI) are also key factors in the market. Companies can create highly targeted ads by being able to analyze large amounts of data and gain actionable insights from it. AI is helping to improve ad placements, audience segmentation, and the overall effectiveness of marketing strategies. This is increasing the demand for online advertising solutions.

Online advertising is being used widely across many different industries. Market growth is being propelled mainly by the retail, automotive, travel & tourism, financial services, and healthcare sectors. Digital advertising effectively boosts e-commerce sales, promotes new products, highlights destinations, and offers market services and product discounts. The auto industry uses digital ads to spotlight new car models and features, while the travel & tourism sector uses online ads to showcase certain destinations and travel packages. The financial services sector leverages digital ads to showcase different services and products, such as credit cards and insurance policies.

M&A

The global online advertising market is forecast to see ongoing significant growth in the coming years. There is plenty of opportunity for consolidation in the market. Ad tech vendors are expected to look for consolidation strategies as they look for ways to become more profitable amid slim profit margins.

Data businesses are also expected to seek consolidation solutions, such as analytics-led agencies merging with engineering firms offering strong products and fresh ideas. Dealmakers are eagerly looking for potential targets or trying to close the deal on those they have already identified to beat the competition.

Additionally, private equity investors are sitting on an abundance of funds that they must deploy sooner rather than later. The whole “wait and see” vibe is dwindling, and players are getting tired of worrying about uncertainties. Restlessness often translates into taking action.

Holding companies are always looking to add new offerings to their product lines, and smaller-scale acquisitions are focusing on add-ons, adding key talent, and sowing organic development. As more companies warm up to new possibilities, more M&A deals of all sizes are expected to occur. Another area that is ripe for M&A activity is in the realm of influencer agencies that deal more with marketing tech and data for influencer/creator businesses.

SCHEDULE A CALL