English Extended Distribution Market Research Reportedtimes Research Newswire Wire

Online Advertising Market Estimated to Grow at a CAGR 11.34% During 2019-2025

The Online Advertising Market valued $230 billion in 2018 and is expected to grow at a CAGR 11.34% during 2019-2025. The growth of the online advertising market is attributed to increasing adoption of smartphones and high usage of e-commerce platforms such as Amazon, Netflix, Sky and others for online buying and selling of products. Adoption of Artificial Intelligence (AI) technology by advertisers for better online advertising will drive the market growth. AI can analyze huge data sets about consumer’s response to online advertising, and those insights are used to boost the performance of advertising companies, thereby driving the market growth.

Online Advertising Market Segment Analysis – By Advertising Format

The mobile advertising market is gaining prominence due to high adoption of smartphones. The mobile advertising segment is projected to grow at a staggering CAGR of 14.77% during the forecast period. Advertisers are using this platform to reach their targeted customers as it is relatively inexpensive compared to traditional advertising methods like TV advertisements; and also helps in reaching out a wide range of customers. According to IndustryARC estimates, around 70-80% of social networking companies generate revenue through mobile advertising. In 2019, around 3.48 billion monthly active users visit social networking sites such as Facebook, YouTube, LinkedIn and others which increased by 9% from 2018. Increasing usage of social media platforms by advertising companies to reach targeted customers and high usage of smartphones rather than desktops for social media platforms is set to drive the mobile advertising market growth.

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Online Advertising Market Segment Analysis – By Geography

North America is the largest revenue contributor to the online advertising market with a market share of 36% in 2018, due to major presence of companies in the region such as Google, Amazon, Facebook and others. According to Amazon annual report, Amazon marketing budget has increased from $7,233m in 2016 to $13,814m in 2018, supporting the fact, company states that their majority marketing spending is on online advertisements. High investments by E-commerce companies such as Amazon and others in online advertisements is set to fuel the online advertising market in this region. According to IndustryARC experts, mobile advertising segment grew by 30% during 2017-2019 in North America. In North America, mobile users are searching for products more on Amazon than on Google, compelling advertisers to invest on online ads in the company. Advertising companies are focusing on online advertisements rather than TV advertisements and other medium as there is huge presence of potential customers who use online platforms for buying products in North America.

Online Advertising Market Drivers

Rising Demand for Content and Email Marketing

Advertising companies are focusing on indirect advertisement methods such as content marketing and e-mail marketing. The companies are creating content in the form of blogs, info graphics, videos, and other related to product or industry. This is one of the effective method to reach target users as it support other marketing efforts such as social media, paid search and SEO (search engine optimization). As per recent IndustryARC studies, it is found that the companies who post content more than 16 times in a month have four times more traffic than advertisers who post few times in a month.

Email marketing is one of the oldest form of online advertising but is one of the most cost effective advertising technique. Additionally, through Email advertising, advertisers can earn ROI of $44 for every $1 which is spent on email. Thus, adoption of content marketing and email marketing method by advertisers help in increasing the advertiser companies’ revenue that in turn will boost the Online Advertising market growth.

High Adoption of PPC (Pay Per Click) Method for Online Advertisements by Advertisement Companies

PPC advertising is based on a bidding system which select target keywords that compete with other advertisers to place advertisements in search engine for those keywords. Many companies such as Amazon, Alibaba, and others are following this method as they pay only when users click on their advertisements. The average cost-per-click across all industries in Google AdWords on the search network is $2.69. According to IndustryARC estimates, more than 35% of clicks go to the top three paid advertisements in the search results. This is attracting the advertising companies to prefer PPC for online advertisements, thereby driving the market growth.

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Online Advertising Market Challenges

Rise of Ad Blockers

Ad blockers prevent online advertisements from being shown on the websites, as advertisements are often interruptive to web users. Hence, ad blocker applications such as AdBlock Plus, 1Blocker, Crystal and others are increasingly installed in order to prevent advertisements from web pages. This is hampering the growth of the online advertising market.

Market Landscape

According to IndustryARC estimates, in 2018, the top 5 players of online advertising market hold 60-70% of the market share. The major players in the online advertising market include Amazon.com Inc., Baidu, Facebook, Google, Microsoft and among others. Acquisitions and adoption of new technologies such as AI and others are the key strategies adopted by players in the online advertising market.

Partnerships/Mergers/Acquisitions

In April 2019, Walmart acquired adtech startup Polymorph labs to enlarge its advertisement business through online digital advertisements using its shopper data. This acquisition will help Walmart to enhance its branding advertisements through the use of new technologies such as machine learning and AI.

In May 2019, Amazon signed an agreement with the Sizmek related to acquisition of Sizmek’s ad server business and DCO (Dynamic Content Optimization) solution. This acquisition will strengthen the Amazon’s online advertising business.

In July 2018, Google had introduced machine learning technology in order to help advertisers in optimizing online advertisement search. Implementing new technologies such as AI and others for effective online advertising will drive the online advertising market.

R&D Investments/Funding

In 2018, AdStage raised $3m funding in order to offer new tools for automating online advertising. It secured $3m from various ventures, which include Forte Ventures, Hubspot, Verizon Ventures, and others. This funding is anticipated to increase online advertising business with high efficiency, which in turn drives the revenue growth for advertising companies.

In 2018, Clearbanc, a company that funds marketing for fast-growing e-commerce brands had raised a $70m investment from a group of investors Emergence Capital, Founders Fund, iNovia Capital, Social Capital, Portag3, CoVenture, Real Ventures, 8VC, FJ Labs, Precursor, WTI, and Berggruen. The rising funds for startup companies will drive the online advertising market growth.

Key Takeaways

The online advertising market is consolidated and top 5 players are holding market share of 60-70%. Companies are adopting acquisitions and technology development as a key strategy to hold their market position.

Mobile advertising has major share in the market in 2018, and it is the fastest growing segment, owing to high usage of smartphones and rise in internet penetration.

North America is poised to attribute the largest market share in online advertising market, owing to presence of large number of e-commerce companies and increase in investments for adoption of new technologies such as AI and others for online advertisements.

Rising demand for content and email marketing methods has been driving the online advertising market as these methods are cost effective.

Related Reports :

A. Digital Video Advertising Market

https://www.industryarc.com/Report/18095/digital-video-advertising-market.html

B. Multi-Screen Advertising Market

https://www.industryarc.com/Report/40/global-multi-screen-advertising-market.html

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Contact Information:

Venkat Reddy
Sales Director
Email: [email protected]
Website: https://www.industryarc.com
Phone: (+1) 970-236-3677