Digital Advertising: The Mammoth Industry That’s Tipped To Top A Trillion Dollars By 2027

Digital Advertising: The Mammoth Industry That’s Tipped To Top A Trillion Dollars By 2027


Aug 17, 2023

Blog Market Research Digital Advertising: The Mammoth Industry That’s Tipped To Top A Trillion Dollars By 2027

Advertising has long been a prolific industry, as famously chronicled in the 2000s TV drama Mad Men. But since the rise of digital advertising in the late 1990s, its pervasiveness, power and monetary potential have only expanded.

BCC Research expects the digital advertising space to surpass the trillion-dollar mark by 2027, growing at a CAGR of 14.7% between 2022-2027. Today, we’re diving into the factors driving the continued expansion of the market and exploring how digital advertising retains its fiscal power.

Smartphones and high-speed internet encourages advertising boom

As the world became increasingly digital, the scope for advertising widened. With more than half of the world’s population using the internet from their phones, it’s little surprise digital advertising is witnessing a boom. As 5G networks further take root, the ease and potential for advertisers to target consumers becomes more profound.

Smartphones are helping brands understand consumers’ interests and what stimulates their decision to purchase. These small but mighty devices provide real-time marketing opportunities for advertisers to engage with users. With the world becoming increasingly digital, smart phones and high-speed internet will further nurture the growth of digital advertising.

Location-based marketing

Location-based marketing allows brands to target customers based solely on their geographic location. This empowers marketing teams to reach customers based on proximity, simplifying the shopper’s journey from discovery to purchase. It uses the mobile device user’s past and current location to display relevant content. The most common are geofencing, geo conquesting, and proximity marketing. Each of these techniques uses different technologies to target users. Among them are GPS, IP address, smart beacons, and more. Location-based marketing helps brands reach specific customer segments with targeted offers, improving customer satisfaction and increasing the value of immediate gratification.

The rising ad spending across the globe is the primary factor supporting the market growth. Brands and businesses are making huge investments in ad and marketing activities to enhance their customer base and brand awareness. For instance, in 2020, Amazon Inc. spent $22 billion in marketing and advertisement activities, increasing around $3 billion from the previous year. The growing ad spending by leading e-commerce companies is boosting market demand.



Digital Advertising: Global Market Opportunities and Forecast to 2027

Tap into the increasingly prolific market for digital advertising with our latest report. BCC Research offers hard data on the evolving nature of the industry and provides in-depth analysis of the trends and technologies influencing the space.

Growing demand for paid search engine ads

Search engines are popular due to their cutting-edge technological innovations and cost-effective strategies. Today, when consumers want to buy something, they go to search engines like Google, Bing, and Yahoo. Whether they want to know exactly what a product is useful for, compare a product’s cost on different retail sites, find a store nearby, or do some research, 71% of a shopper’s journey starts with a search engine. In other words, consumers have the highest purchasing intention in search engines. This is why paid search ads is so effective yet competitive. Paid search engines use several cost metrics to calculate the cost of ads, including:

  • Average cost/pay per click
  • Average click-through rate
  • Average cost per lead
  • Average conversion rate
  • Average cost per thousand

Paid search engine ads enable businesses to advertise within the sponsored listings of a search engine or a partner site by paying either each time their ad is clicked, less commonly when their ad is displayed, or any other cost metrics. These ads can be triggered based on keywords, geographic location, or behavioral targeting related to the product or service. It is the best way to get directly in front of consumers right when they are searching. The amount advertisers spend on paid search ads is expected to increase in the coming years. Most of that growth will be driven by mobile search ads, estimated to account for two-thirds of search ad spending by 2027.

Advancements in search engines, like voice search to increase the effective search for users, are expected to accelerate demand for paid search ads. Technological developments and advancements in big data analytics, machine learning (ML), and artificial intelligence (AI) have allowed the identification of potential customers and delivery of customized ad content, which have accelerated the global digital ad market growth.

Dive into the market for digital advertising

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    Olivia Lowden

    Written By Olivia Lowden

    Olivia Lowden is a Junior Copywriter at BCC Research, writing content on everything from sustainability to fintech. Before beginning at BCC Research, she received a First-Class Master’s Degree in Creative Writing from the University of East Anglia.

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