Until not so long ago, all of our understanding of advertising was limited to radio and television commercials, place-based advertising and advertising in the bottom half of newspaper pages; but today the expansion of the internet and cyberspace has led to the emergence of a new type of advertising called digital advertising. Digital advertising refers to the method of advertising a product or service through the internet or buying advertising space with the aim of driving traffic, brand awareness and increasing sales using data-driven strategies. Types of digital advertising include advertising on search engine results pages, advertising on social media, banner advertising, video advertising and paid digital classified ads. In the present piece, Statista's 2023 report on the digital advertising market is examined and prominent statistics and information in this field are analyzed.
Digital advertising revenue by type of advertising
Digital advertising revenue in 2022 reached 616 billion dollars. This is while global digital advertising revenue is expected to increase to more than 1 trillion dollars by 2027. The largest segment of this market relates to search advertising with a market volume of 260 billion dollars in 2022, which according to the forecast made will reach 435 billion dollars by 2027. An examination of the 10-year trend of the digital advertising market shows that in the said period, this field will grow at an average compound rate of 15.6 percent annually.
The digital advertising market by country and region
Among the three large digital advertising markets, namely the United States, China and Europe, the largest market in 2022 related to the United States with a turnover of 261 billion dollars. On this account, the United States has accounted for more than one-third of the world's digital advertising revenue, and China and Europe, with about 25 and 17 percent respectively, occupy the subsequent places. According to the forecasts made, from 2022 to 2027 the United States of America, with an 11 percent compound annual growth rate, will have the greatest growth in the digital advertising field, and its revenue will reach more than 440 billion dollars in 2027. In the same period, the compound annual growth rate for China, Europe and the rest of the world is forecast at 10.6, 9.1 and 8.9 percent respectively.
The digital advertising market under the dominance of mobiles
In 2019 and for the first time, digital advertising revenue through mobile overtook computer advertising, and after that this trend has also continued, such that in 2022 the share of digital advertising through mobile reached 61 percent. According to forecasts, mobile dominance of the digital advertising market continues and in 2027, 69 percent of total digital advertising revenue is allocated to the mobile phone.
The largest share of the digital advertising market belongs to search advertising
Search advertising, which is also called search engine advertising or paid search advertising, refers to ads displayed on search results pages above or beside the search results. These ads are usually text-based, but when necessary they can be displayed as an image or a video. Google, Bing, Baidu, Amazon and Alibaba are key players in search advertising.
The size of the search advertising market in 2022 was 260 billion dollars, which according to the forecast made will reach 435 billion dollars by 2027. An examination and forecast of the 10-year trend of the search advertising market shows that this segment has average annual growth equivalent to 15.1 percent. In 2017, 40 percent of this market was based on mobile, which in 2022 reached 53 percent.
Banner advertising, an old but durable method
Banner advertising is among the first digital ads that are published on the internet. Banner advertising allows people, using images, shapes and display sizes, to present attractive ads on websites, apps or social media. The main goal in this work is to drive the traffic of target audiences to a particular website. Banner advertising includes skyscrapers, wallpapers, interstitial images and pop-up ads that are usually linked to the advertiser's page.
The banner advertising market in 2022 was equal to 155 billion dollars, which according to the forecast made will reach the figure of 227 billion dollars by 2027. An examination and forecast of the 10-year trend of the banner advertising market shows that this segment has average annual growth equivalent to 11.6 percent. In 2017, 54 percent of this market was based on mobile, which in 2022 reached 70 percent.
The popularity of video advertising
Video advertising includes all advertising formats in web-page-based, app-based, social media or streaming-app videos on computer screens, smartphones, tablets and other internet-connected devices. Integrated videos with native form and function such as news websites and video platforms (native advertising) also fall in the video advertising category. The size of the video advertising market in 2022 was 180 billion dollars, which according to the forecast made will reach 319 billion dollars by 2027. An examination of the 10-year trend forecast of the video advertising market shows that this segment has average annual growth equivalent to 24.5 percent. In 2017, 47 percent of this market was based on mobile, which in 2022 this ratio reached 66 percent and according to forecasts will reach 78 percent by 2027.
The small share of digital classified ads in the digital advertising market
Digital classified ads refer to online advertising posts that list products and services in categories. Advertising spending in ads includes costs that advertisers pay to display an online ad and list it in a particular category. The cost must be paid by the advertiser regardless of the result of the ad. Advertising costs in ads are divided into four categories: jobs, vehicles, real estate and general. Revenue of digital classified ads in 2022 was 21 billion dollars, which according to the forecast made will reach the figure of 24 billion dollars by 2027. A forecast of the 10-year trend of digital classified ads shows that this market has average annual growth equivalent to 3.3 percent. Among the four categories present in the digital classified ads market, respectively the general and real estate category with 28 percent, jobs with 24 percent and vehicles with 20 percent are the segments constituting this field.
The prevalence of advertising on social media
Advertising on social media is a form of online digital marketing in which advertising campaigns with paid banners and video are run on social media platforms in order to reach target audiences. Marketers can advertise brands, products and services and increase purchase intent in audiences. Key players in social media advertising include Facebook, Instagram, Twitter, TikTok, LinkedIn, Weibo, Naver and Kakao. Revenue of advertising on social media in 2022 was 226 billion dollars, which according to the forecast made will reach 385 billion dollars by 2027. A forecast of the 10-year trend of advertising on social media shows that this segment has average annual growth equivalent to 22.3 percent. In 2017, 70 percent of this market was based on mobile, which in 2022 this ratio reached 82 percent and according to forecasts will reach 83 percent by 2027.
Conclusion
The future of digital advertising will have a deep impact on the advertising industry. Precise knowledge and awareness of this new approach is vital for marketers and businesses; because in recent decades, with the pervasive advance of technology and the expansion of the internet, the world of commerce has also been affected. Among the various types of digital advertising, search advertising with 260 billion dollars of revenue in 2022 has accounted for the largest market in this field. After that, advertising on social media with 226 billion dollars, video advertising with 180 billion dollars, banner advertising with 155 billion dollars and digital classified ads with 21 billion dollars have occupied the second through fifth places. An examination and forecast of the 10-year trend of the digital advertising market shows that the video advertising segment, with a compound annual growth of 24.5 percent, will have the greatest growth through 2027.
In an overall view, digital advertising is growing and will develop further in the future. Given the advance of technology, the growth of e-commerce, the increase in the use of social media and smart technologies, the use of data analysis tools and the emphasis on user experience, advertising companies must improve their strategies and respond to new opportunities.
Machine-translated from Persian by Namafar; the Persian original is authoritative. Read the original in Persian