Digital Video Advertising Market Size Forecast to Reach $34.6 Billion by 2026

Digital Video Advertising Market | IndustryARC
Rising Usage of Digital Media Has Been Acting as One of the Major Driving Factor Towards the High Growth of Digital Video Advertising Market.

Global Digital Video Advertising market is forecast to reach $34.6 billion by 2026, growing at a CAGR of 12.0% during the forecast period from 2021 to 2026. The rising dominance from e-commerce sector along with the growing usage of digital media globally is acting as major drivers towards significant market growth of digital video advertising. Moreover, with higher internet connectivity standards and technological growth such as implementation of AR in advertisement is also propelling the demands towards digital video advertising market. The growth of the online advertising market is attributed to the increasing adoption of smartphones and the high usage of e-commerce platforms such as Amazon, Netflix, Sky, and others for online buying and selling of products. Adoption of Artificial Intelligence (AI) technology by advertisers for better online advertising will drive market growth. AI can analyze huge data sets about consumer’s response to online advertising, and those insights are used to boost the performance of advertising companies, thereby driving the market growth.

Digital Video Advertising Market Segment Analysis – By Device Platform

Mobile Phones are anticipated to have a major growth in the digital video advertising market during the forecast period 2021-2026 at 13.7% CAGR. With rising penetration of smartphones due to high affordability along with increasing content sharing through social media platforms is causing major growth of digital video advertising market. Moreover, majority of the global population nowadays have been investing their time in using mobile devices for either chatting across various social platforms, watching movies as well as playing games and many such applications. The rising growth of audience across such platforms in mobile phones have been causing the advertising companies to invest towards providing video ads in between the applications to gain customers and expand their market reach thus propelling its market growth. Advertising companies have been highly investing in various mobile games by offering additional credits to the players for viewing digital video advertisements between games, thus expanding the customer base. Since mobile phones provide location access, this causes the advertisers to know about the preferences of the user and display ads accordingly.

Digital Video Advertising Market Segment Analysis – By Ad Format

The Linear advertising market is gaining prominence due to high adoption of smartphones. The linear advertising segment is projected to grow at a staggering CAGR of 14.2% during the forecast period 2021-2026. Advertisers are using this platform to reach their targeted customers as it is relatively inexpensive compared to traditional advertising methods like TV advertisements; and also helps in reaching out a wide range of customers. According to IndustryARC estimates, around 70-80% of social networking companies generate revenue through mobile advertising. In 2020, around 3.48 billion monthly active users visit social networking sites such as Facebook, YouTube, LinkedIn and others which increased by 14% from 2019 primarily driven by Covid-19. Increasing usage of social media platforms by advertising companies to reach targeted customers and high usage of smartphones rather than desktops for social media platforms is set to drive the direct advertising market growth.

Digital Video Advertising Market Segment Analysis – By Geography

North America is anticipated to have a significant growth in the global digital video advertising market during the forecast period from 2021 to 2026 at 14.1% CAGR. Increasing growth of social media platforms such as Facebook, Snapchat and many others along with rising penetration of smartphones have been helping in propelling the market demands towards digital video advertising market in this region. Moreover, growing dominance towards OTT platforms and high investments towards research and development from large enterprises are also causing significant market growth of digital video advertising. Presence of some players such as Interactive Advertising Bureau, Buzzfeed Inc. and Verizon Media have been acting as major drivers in fueling the market growth of digital video advertising.

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Digital Video Advertising Market Drivers

Increased usage of digital media

Rising usage of digital media has been acting as one of the major driving factor towards the high growth of digital video advertising market. Since the growing penetration of internet connectivity, global population have been highly shifting towards social media platforms such as Facebook, Twitter, Instagram and many others for entertainment, online communication and many others. Moreover, rising growth of OTT platforms such as Netflix, Amazon prime and many others for entertainment are highly driving the growth of digital video advertising market. This rising growth towards digital media platforms mostly by youth population has created higher spending on digital advertisements by the organizations. One of the major growing platforms, YouTube which is used for various applications such as entertainment, education purpose, and many others makes use of various digital video ads in between the videos to gain more audience on the platform. Certain specific YouTube videos are marked with various digital ads which have to watched in order to finish the entire video content on the platform. These factors essentially help the advertising companies to generate large amounts of revenues as the digital media customer base has been steadily rising over the years.

Growing adoption from E-commerce sector

The rising adoption of digital video advertising from E-commerce industry has been acting as one of the major driving factor towards the significant market growth. Rising technological advancements have caused the E-commerce sector to highly spend towards digital video advertising to attract and gain more customers and improve its business productivity. Usage of digital video advertising helps to provide a positive impact towards the business marketing and sales as there are certain ads while visiting ecommerce sites. Moreover, major growing ecommerce industry such as Amazon, Flipkart and many others have been creating major sales through their online advertising across social media platforms, gaming platforms, television and many others have been helping them to sell their products more efficiently. High quality digital video presentation of content helps in increasing investments of consumers towards the ecommerce products shown on various platforms by seeking their attention within short time intervals. Recently, YouTube announced a new direct response ad format that will make the advertisements more shoppable by addition of browsable product images below the ads, thus driving the user traffic directly towards product pages. This introduction was made in order to help advertisers capture the consumers rising interest towards e-commerce shopping due to the surging pandemic. Such rising developments towards e-commerce sector can further propel the demands for digital video advertising market in the near future.

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Digital Video Advertising Market Challenges

Higher costs

High costs have been acting as a major challenge towards hampering the growth of digital video advertising market. Since the growth of social media and digital content, advertisements have been facing major growth over the years. The price for digital video advertisements keeps on growing as it highly depends upon the quality of the content, amount of traffic requirement and many others, which creates slower demands from small scale industries. Moreover, digital advertisement across some of the popular and largest platforms such as YouTube, Facebook and many others requires high investments to gain an expanded audience platform. Furthermore, creation of digital ad video commercials to be displayed across television requires high funding as there are costs associated with setup, artists, marketing and many others. Such factors have been restraining the market growth towards digital video advertising.

Digital Video Advertising Market Landscape

Partnerships and acquisitions along with product launches are the key strategies of the players in the Digital Video Advertising Market. The major key players in the Digital Video Advertising Market include Interactive Advertising Bureau, Buzzfeed Inc., Mashable, Vice Media Group, Tremor International, Verizon Media, Yahoo, Viant Technology, SpotX and PubMatic.

Partnerships/Product Launches/Acquisition

In April 2020, Ogury announced the launch of Video Chooser, which will help in providing mobile video advertisements driven by user choices. This development by the company helps the users with the option of choosing three brands ads to watch with full screen display availability. With this, advertisers need to pay only if the user sees the video, causing major benefits for the advertising companies.

In November 2019, StackAdapt had announced partnership with SpotX with focus on connected TV inventory and audience, causing the advertisers to reach Canadian viewers of OTT content. This partnership was made to provide the advertisers working with StackAdapt access premium inventory for more than 600 media owners through the SpotX CTV network, which reaches over 44 million households across U.S and Canada.

Key Takeaways

Mobile Phones are expected to have a significant market growth during the forecast period in digital video advertising due to its growing affordability of smartphones and usage of social media applications.

Key market players such as Buzzfeed Inc. and Interactive Advertising Bureau have been helping towards significant market growth of digital video advertising in North America.

The rising adoption from eCommerce industry along with increased usage of digital media is some of the major driving factors towards significant growth of digital video advertising market.

Related Report:

Online Advertising Market

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