Internet advertising has gone from being an uncertain bet to serving as the primary platform for most companies’ marketing campaigns. In the U.S., the growth in digital advertising continues to grow by double digits on an annual revenue basis, with total spending reaching $209.7 billion in 2022, a year-over-year increase of 10.8%.
While U.S. digital advertising has grown significantly, mobile advertising has been outpacing all other platforms. It continued the trend in 2022, increasing by 14.1% to $154.1 billion.
Technology advances such as the rollout of 5G and innovations in virtual reality effects are expected to continue to drive mobile advertising to greater overall market share.
This type of marketing involves an automated bidding process in real-time for advertising inventory. It provides the opportunity to show an ad to specific customers in specific contexts.
Advertisers can create an automated buying plan based on segments offered on an ad exchange, which introduces elements of financial trading to digital advertising. A company may have very specific demographics in mind, like mothers of young children who haven't purchased vehicles in five years. Some of the platforms can place ads for that demographic.
Programmatic advertising revenues overall grew to $109.4 billion in 2022, a year-to-year increase of 10.5%.
A separate report by Insider Intelligence suggests that programmatic marketing is already dominant in the industry, accounting for more than 90% of ad spending.
Content marketing is an old trend that has been made new again. Many advertisers have struggled to measure the effectiveness of banner ads and display ads on content. Does an ad for Ford (F) on an article about how to choose a truck help with sales? How about brand recognition?
These are questions that may never be answered to the satisfaction of the marketer or the publisher. For this reason, content marketing has emerged as an attractive alternative.
Instead of serving up an ad, companies are embedding a marketing pitch inside the content. This can manifest in the form of publisher-tailored content, which the advertiser can sponsor, or content published directly by the advertiser.
There are some caveats to a business spending time and money on content creation, but the success of several companies has given fresh legs to the “brands as publishers” movement.
The latest trend revolves around personalization, or making consumers feel as though you are speaking directly to them. Social media platforms have grown in sophistication to offer greater video capabilities.
Twitter was an early adopter of this type of campaign. The company (now owned by Space X Corp.) placed its bets on live video, mainly wrapped around sporting events. By 2016, Twitter and its advertising partners were creating 600 hours of video for 400 events. In 2018, the social media platform inked a deal with Fox Sports to stream live shows wrapped around the FIFA World Cup soccer tournament - a first for Twitter.
Video continues to be a dominant digital strategy, with video spending totaling $47.1 billion in 2022.
The platforms where it will be seen are expanding, however. A report by HubSpot indicates that 22% of marketers cite Instagram as the platform with the most potential in 2023. Not coincidentally, Instagram ranks as the top social media destination for the Gen Z audience.
What Exactly Is Digital Advertising?
Digital advertising is a sales pitch presented to an audience on the internet.
Internet marketing is a broader term. An internet sales pitch may be part of a multi-faceted marketing campaign to persuade consumers to buy a product. The "buy" message is embedded in content that may include video and audio entertainment, a social media campaign, a celebrity spokesperson, a contest, and any number of other elements designed to grab the attention of consumers.
What Company Makes the Most Money from Digital Advertising?
The reigning king of advertising revenue remains Alphabet. No surprise since the websites owned by the holding company include Google Search, Google Ads, YouTube, Google Maps, Google Play, and Google AdMob.
Meta, Amazon, Microsoft, and Alibaba round out the top five.
Does Search Still Dominate Digital Advertising?
Search revenue is still growing but its overall market share is decreasing, according to the Internet Advertising Bureau.
That is, marketers are still paying to place their links prominently in search results. However, much of their money is going to create and promote video content.
The Bottom Line
Growth in the digital advertising industry will continue alongside innovation.
New deeper levels of demographic data and real-time bidding have killed the need for blind ad buys.
Consumers are also becoming increasingly jaded when it comes to advertising, forcing companies to couch their messages in creative ways. But the future is bright for digital advertising.