Internet Advertising Market

The global market for internet advertising had a value of $319 billion in 2019 and is projected to reach $1,089 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 17.2% from 2023 to 2030. Internet advertising involves using the internet as a medium to deliver targeted marketing or promotional messages to an identified audience. Its purpose is to attract website traffic, increase brand exposure, and encourage specific actions, such as making a purchase. Internet advertising is an effective method for businesses of all types to acquire new customers, expand their reach, and diversify revenue streams. Various forms of internet advertising, such as banners, pay-per-call ads, pay-per-click ads, and pop-ups, are employed in e-newsletters, search engines, compatible websites, and online versions of magazines and newspapers to target internet users for shopping or information gathering. Internet advertising not only helps brands connect with their intended audience but also offers a fast and convenient way to engage with the target market.

During the COVID-19 pandemic, the utilization of social media platforms increased significantly, leading to a surge in the use of these platforms to promote TV shows, movies, music, and other media content to target audiences. This trend has driven the growth of internet advertising in the media and entertainment industry. Instagram, Facebook, and Twitter have become popular platforms for promoting and marketing entertainment and media content, as they effectively engage audiences and generate excitement before releases on these respective platforms.

In terms of ad format, search engine advertising or search engine marketing witnessed the highest growth in the internet advertising industry in 2019 and is expected to maintain its dominance in the future. The increase in online shopping and product research by consumers contributes to the growth of search engine advertising. Additionally, multinational companies are focusing on enhancing their online visibility, leading to increased demand for search engine advertising. However, the social media advertising segment is expected to witness the highest growth due to the growing demand for social media platforms.

Mobile advertising held the largest market share in the global internet advertising market in 2019 and is expected to maintain its dominance in the coming years. Factors such as the increasing number of mobile device and mobile internet users, the popularity of social media, and the amount of time spent on mobile devices contribute to the dominance of the mobile segment. Key players in the mobile advertising industry create content specifically designed for mobile devices, further supporting the growth of mobile-based internet advertising. The rise of e-commerce and m-commerce also drives internet advertising on mobile platforms, as more people use their mobile phones for internet browsing and online shopping.

In terms of industry vertical, the retail and e-commerce segment dominated the global internet advertising market in 2019 and is expected to maintain its dominance. Smaller businesses in the retail and consumer goods industry are striving to compete with larger organizations in a highly competitive marketplace filled with innovation. Retailers are focusing on enhancing their internet advertising strategies to raise awareness about their businesses and drive traffic to their e-commerce sites

By Ad Format
The internet advertising market in North America is dominated by the increased spending of advertisers on digital advertising. This factor significantly contributes to the market's growth in the region. Notably, events like the Olympic Games in Tokyo and the upcoming 2023 elections are expected to further drive ad spending in the United States, thereby propelling the growth of the internet advertising market. Magna Global, the strategic global media unit of IPG Mediabrands, predicts a growth rate of ad spending in the U.S. from 5.1% in 2019 to 6.6% in 2023. However, the Asia-Pacific region is expected to witness the highest growth rate during the forecast period. The proliferation of mobile devices, social media, and apps is a major driving factor behind the expanding internet advertising market in this region. Notably, countries like India, China, and Indonesia are experiencing significant app usage and smartphone adoption.

By Pricing Model
The report focuses on the growth prospects, limitations, and opportunities in the internet advertising market. It provides a Porter's Five Forces analysis of the internet advertising industry, assessing the impact of various factors such as supplier bargaining power, competitive intensity, the threat of new entrants, the threat of substitutes, and buyer bargaining power on the market trends of internet advertising.

By Enterprise Size
Segment Review
The internet advertising market is segmented based on type, platform, organization size, industry vertical, and region. In terms of type, it is categorized into search engine advertising/search engine marketing, display advertising, mobile advertising, social media advertising, video advertising, online classified ads, and others. The platform classification includes mobile devices; laptops, desktops, and tablets; and others. Enterprise size categorization consists of large enterprises and small & medium-sized enterprises. Industry verticals covered include automotive, healthcare, media & entertainment, BFSI, education, retail & consumer goods, transportation & tourism, IT & telecom, and others. The regional analysis covers North America, Europe, Asia-Pacific, and LAMEA.

COVID-19 impact analysis
Following the COVID-19 pandemic, the internet advertising market is projected to experience significant growth. It is estimated to increase from $359 billion in 2023 to reach $1,089 billion by 2030, with a compound annual growth rate (CAGR) of 17.2%. The projected value for 2030 is higher than pre-COVID-19 estimates. Although the outbreak had a relatively low impact on the market's growth, some brands may have reduced their advertising spending due to the economic effects of the pandemic. However, the surge in social media traffic presented unique opportunities for engaging with online audiences and maintaining high brand awareness. Additionally, the global spread of the coronavirus led to the closure of public spaces, schools, and borders, prompting businesses and marketers to update their online marketing strategies. As a result of the pandemic, businesses are expected to invest more in online advertising, further fueling the growth of the market. For example, according to the Interactive Advertising Bureau (IAB), traditional TV advertising spend is estimated to decline by 24% in 2023 compared to 2019, while connected TV advertising spend is projected to grow by 19% year over year

Top Influencing Factors
The growth of the global internet advertising market is driven by several factors, including the widespread adoption of smartphones, the emergence of high-speed internet, the proliferation of social media, increased digital advertising spending across various industries, and the rising popularity of streaming platforms. Furthermore, the COVID-19 pandemic has increased business owners' interest in online advertising to enhance brand awareness and gain a competitive advantage, thereby fueling market growth. However, the rise in ad-blocker adoption to avoid online advertising poses a hindrance to market growth to some extent. On the other hand, the emergence of advertising automation presents lucrative opportunities for market growth. The adoption of identity-based pay-per-click marketing by businesses to achieve greater marketing success is also expected to drive market growth during the forecast period.

Extensive adoption of smartphones and emergence of high-speed internet
The rapid adoption of smartphones and the availability of high-speed internet have transformed consumer interactions with brands and sellers. This trend is expected to drive the growth of the internet advertising market, as it has become crucial for brands to understand consumer interests through smartphone advertisements and influence their purchasing decisions. Smartphones provide real-time marketing opportunities for advertisers to engage with users who genuinely want to connect with their brands. Market players are offering new internet advertising solutions to meet the growing demand for smartphone-based advertising, further fueling market growth. For instance, in October 2019, Tech Mahindra collaborated with InMobi to provide a video advertising solution, enabling advertisers to create and distribute engaging video ads on mobile phones.

Emergence of Advertising Automation
Automation technologies are rapidly emerging in the advertising sector, offering efficiency, scalability, and cost-effectiveness to advertisers. This trend presents opportunities for growth in the online advertising market. Automation is being adopted across various advertising platforms, including Google and Facebook. Google incorporates automation through automated bidding strategies, ad copy, and PPC reporting. Facebook's Automated Rules automatically monitor and manage users' campaigns, ad sets, and ads. It is projected that by the end of 2023, 80% of the internet advertising process will be automated, with the remaining 20% requiring human involvement for storytelling, brand value, and experiential tactics. The increasing adoption of automation technologies in internet advertising is expected to provide numerous opportunities for market growth.

Key benefits for stakeholders
• This analysis provides a comprehensive assessment of the internet advertising market, including trends and future predictions, to identify promising investment opportunities.
• The report offers insights into the key drivers, restraints, and opportunities in the online advertising market.
• The quantitative analysis of the internet advertising market size from 2019 to 2030 demonstrates the financial strength of the industry.
• Porter's five forces analysis reveals the influence of buyers and suppliers in the internet advertising market, highlighting their potency.