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Online Advertising Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 120 Pages
  • October 2021
  • Region: Global
  • Mordor Intelligence
  • ID: 4602258

The Online Advertising Market is expected to grow at a CAGR of 14.3% over the forecast period (2021 - 2026). The Covid-19 pandemic had a positive effect on the Online Advertising Market. The pandemic leads to lockdowns and works from home scenarios; People are not getting out of their houses, which leads to the growth of the online advertising market. People became more attracted onwards online portals and social networking sites, which resulted in increased online population and streaming.

Key Highlights

  • The COVID-19 pandemic is having a significant impact on various industries, and digital advertising is not an exception. With the COVID-19 pandemic, business owners assess their marketing efforts and wonder if it is the best time to run online ads.
  • For instance, According to a report by the Interactive Advertising Bureau, almost 24% of media buyers, planners, and brands paused ad spending until Q2 2020. While nearly 46% indicated, they would adjust their ad spending across the same period.
  • As most end users are now operating online with digital gadgets and uncertainty of pandemic to end, many organizations are planning to shift their advertising investment to digital platforms.
  • The increasing technological advancements coupled with increasing digital spending by enterprises is expected to drive the online advertisement market over the forecast period.
  • Over the years, technological developments regarding the internet, combined with its increasing commercial use and the rapidly growing number of internet users worldwide, have not only shaped the evolution of online advertising and produced different forms of digital advertising but have also given rise to new advertising business models and new market levels and players.
  • Additionally, there are different types of advertisements for mobile devices, including click to download, click to call, image text, and banner ads. Moreover, consumers widely prefer smartphone devices over laptops or desktops, owing to convenience and portability. Similar operations can be performed on the former, owing to which mobile platforms are expected to grow lucratively.
  • Moreover, the 6-second ad is increasingly gaining popularity on various social media platforms. According to new research by the Advertising Research Foundation, short-form, six-second ads on TV capture 8% to 11% more attention per second than longer ads.

Key Market Trends

Video Format to Witness High Growth

  • With the introduction of new platforms and formats, the possibilities of video marketing are expanding. While spending on traditional television advertising is declining, digital video market spending is increasing.
  • According to the Interactive Advertising Bureau (IAB), most of the expenses are allocated to mobile and desktop advertising, amounting to almost two-thirds of the total advertising budget for video ads.
  • Wyzowl’s study in the field of video marketing shows that digital video is one of the main trends of 2020. Moreover, video ads capture the attention of the audience better than any other type of ad.
  • According to Videology, a video advertising platform, it was found that 46% of the digital video ads viewed were in the length of 15 seconds. Additionally, the share of the cross-screen in the number of digital video ad campaigns in the United States was 98%.
  • Moreover, FreeWheel, A Comcast Company, a provider of comprehensive ad platforms, Entertainment and Media, and Consumer packaged goods, accounted for 19% and 15% of video ad views.

North America Occupies the Largest Market Share

  • Rapidly increasing investments associated with digital ads, particularly online advertisements, are expected to drive the growth of the market studied in North America. Also, the region is highly aware and mature in terms of smartphones and online activity, which creates many opportunities for advertisers.
  • Additionally, the United States has a strong foothold of online advertising vendors, which contributes to the growth of the market. Some of them include Google Inc., Microsoft Corporation, Twitter, Inc., and Amazon.com.
  • In July 2020, Google launched new features aimed at helping advertisers using the company's services to make their products stand out in web search results and on other platforms.
  • One of the new features from the company lets Google Search users configure their ads in a manner that has Google fetch relevant images from the advertiser's online materials and include those images within search results.
  • Advertisers in the cryptocurrency industry recently faced a throughout ban from Google to advertise their platform. However, with the increasing applications of diverse cryptocurrencies in several industries and associated regulations, Google reversed the ban on cryptocurrency-related advertising in the United States in the recent past.

Competitive Landscape

The online advertising market is highly competitive, owing to the presence of many large players in the market operating on a global scale. The market appears to be moderately concentrated, with major players adopting key strategies like mergers, acquisitions, and service innovation. Some of the major players in the market are Google LLC, Facebook Inc., and Twitter Inc.

  • October 2020 - Microsoft Advertising introduced multi-factor authentication in Microsoft Advertising online. The company is now extending the rollout of multi-factor authentication to all users who sign in through a third-party application that uses the Microsoft Advertising API.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Impact of COVID-19 on the Online Advertising Industry
4.2.1 The shift from traditional advertising to digital medium has witnessed considerable growth
4.2.2 Overall ad spending across major categories to witness a decline in 2020 due to falling revenues
4.2.3 Organizations looking at targeted advertising as a means to optimize spending
4.2.4 Impact of changing digital consumption behavior on the online advertising industry
4.3 Market Drivers
4.3.1 Ongoing shift from Traditional to Online Advertising
4.3.2 Increasing Use of Mobile Devices and consumption of digital content
4.3.3 Emergence of novel advertising techniques coupled with growing trend of mobile apps-based advertising
4.4 Market Restraints
4.4.1 Operational complexities and concerns over effectiveness of communication in mature end-user industries due to presence of incumbents
4.5 Value Chain Analysis
4.6 Industry Attractiveness- Porters Five Forces Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5.1 Format
5.1.1 Social Media
5.1.2 Search Engine
5.1.3 Video
5.1.4 Email
5.1.5 Other Advertising Formats
5.2 Platform
5.2.1 Mobile
5.2.2 Desktop and Laptop
5.2.3 Other Platforms
5.3 End-user Industry
5.3.1 Automotive
5.3.2 Retail
5.3.3 Healthcare
5.3.4 BFSI
5.3.5 Telecom
5.3.6 Other End-user Verticals
5.4 Geography
5.4.1 North America US Canada
5.4.2 Europe UK Germany France Spain Italy Netherlands Poland Rest of Europe
5.4.3 Asia Pacific China Japan South Korea India Rest of Asia Pacific
5.4.4 Latin America
5.4.5 Middle East and Africa
6.1 Company Profiles
6.1.1 Google LLC
6.1.2 Facebook, Inc
6.1.3 Microsoft Corporation
6.1.4 Twitter Inc.
6.1.5 Adobe Systems Inc.
6.1.6 Baidu, Inc.
6.1.7 Yahoo Inc.
6.1.8 IAC/InterActiveCorp
6.1.9 Amazon.com, Inc



Companies Mentioned

A selection of companies mentioned in this report includes:

  • Google LLC
  • Facebook, Inc
  • Microsoft Corporation
  • Twitter Inc.
  • Adobe Systems Inc.
  • Baidu, Inc.
  • Yahoo Inc.
  • IAC/InterActiveCorp
  • Amazon.com, Inc.