The State of Online Advertising: The State of Digital Marketing Address 2020
Digital marketing spends are predicted to reach $1.8 trillion by 2021. Here is a comprehensive report on the state of online advertising in 2020.
The global online advertising market is growing at a healthy rate and is forecast to reach $1.8 trillion by 2021. This represents a compound annual growth rate (CAGR) of 14.2% from 2016 to 2021, up from $1.2 trillion in 2016, according to eMarketer’s latest numbers.
Search remains the largest category of digital ad spend, and will grow at a CAGR of 11.9% between 2016 and 2021 to reach $532.42 billion—nearly one-third of the total digital ad market. Display-related ad spending will also increase, reaching $496.87 billion by 2021 (a CAGR of 16%). Social media ad spending will grow even faster, at a CAGR of 23% to reach $274.29 billion by 2021—surpassing radio ($170.81 billion) and print newspapers ($156.95 billion) to become the second-largest category of digital ad spend behind search ads.
The mobile share of digital ad spending will continue to increase as well, reaching 72% by 2021, up from 59% in 2016. This represents a CAGR of 19%, which is higher than the overall digital ad spend growth rate due to the continued shift in consumer behavior toward using mobile devices for both search and discovery activity as well as for making purchases online.
Paid search ads will continue to be the largest category of mobile ad spend, followed by social media ads and then display-related ads. Video ads will also play an increasingly important role in mobile advertising, with eMarketer predicting that they will make up nearly one-quarter (24%) of all mobile ad spending by 2021—up from 15% in 2016. In terms of specific platforms, Facebook will remain the leader in terms of both total ad spend as well as mobile ad spend, followed by Google and then Alibaba (which is particularly strong in China).
In terms of specific industries, retail (including ecommerce) will continue to be the biggest advertiser on digital channels, followed by financial services and then technology/ telecom companies. However, it’s worth noting that there are some industries that are particularly strong in terms of their use of specific digital marketing channels—for example, auto companies are heavy users of display advertising while travel companies are big spenders on paid search ads.
