US Digital Advertising Market Report 2023
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This report explores the US digital advertising market in extensive detail. Over 50 pages of content provide the most significant market developments and consumer trends. Use it to propel your business today.
Below, we’ve defined the scope of the report, summarised the key areas covered, and provided handpicked insights from the report.
Report Definition
Digital advertising includes internet-delivered ads in paid search advertising, digital video ads, display advertising, podcast advertising, and other forms of digital advertising that include but are not limited to email acquisition, audio streaming, classified ads, lead generation services, and apps.
Key Areas Covered
- Market size and segmentation of the US digital advertising sector, along with revenue growth forecasts through 2028.
- Key players in the digital advertising landscape and development priorities.
- Trends in digital advertising effectiveness, consumer attitudes and reactions towards digital ads.
- Opportunities for future success for digital advertisers and publishers.
US Digital Advertising Market Overview
Digital and alternate advertising drove growth in the US ad and marketing industry, with total spend increasing by 8.5% in 2022 vs 2021. Mintel also estimates US digital ad market revenue to grow 13% in 2023 over 2022. Despite strength in the digital ad market, it’s not without challenges. New privacy standards coming into play will affect how advertisers collect data for targeting. This report explores ways to strategise and position effectively in light of these challenges.
What’s Next for the Digital Ad Industry?
Now is the time to board the privacy train. Despite delays, it’s necessary to be at the station upon arrival. AI is the obvious option, but there are others, such as building out first-party data where possible, utilising different metrics, such as MER to measure success, media mix modeling, and cohort-based or contextual targeting.
When adjusted for inflation, the market is forecast to increase by 51% from 2023-28.
Buy the full report to access the opportunities available from our expert’s deep research. Looking for something else? Explore our marketing and promotion research.
Additional Features Included in Your Report
Different Digital Formats: PDF for conveniently sharing with your team, PowerPoint for quickly including in your presentation, as well as an Infographic and an Excel Databook.
Mintel’s Clients Portal: Our portal offers instant access to actionable analysis and trends pieces relevant to your industry that are published almost daily. You can also browse for more market research reports.
Expert Analysis
Our analyst Jenni Nelson delivers key insights with this report, making sense of the numbers with critical analysis.
Digital advertising is in a time of transition as marketers and platforms seek substitutes to user-level data. Despite numerous delays at the federal level, new platform standards and state regulations regarding privacy are in place with more coming. Interest in AI-enabled search is promising, while digital audio and video ad revenues are poised for continued strong growth.
Jenni Nelson
Analyst, Tech, Media and Entertainment
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
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Executive Summary
- Top Takeaways
- Consumer trends
- Recall appears dismal, but some of that may be because ads aren’t recognized as such
- Figure 1: Digital ad recall in the last 7 days, 2020-23
- Men under 55 most tolerant of and engaged with digital ads
- Figure 2: Digital ad engagement, by gender and age, 2023
- Young, culturally diverse consumers use AI-powered search for guidance on their purchases
- Figure 3: Key demos: coverage(percent) and index, Net interest in AI-powered search, 2023
- Ads that disrupt static online experiences are least tolerated
- Figure 4: Attitudes toward digital ad tolerance, 2023
- Market predictions
- Figure 5: Total US revenues and fan chart forecast of digital advertising, at current prices, 2018-28
- Figure 6: Digital advertising outlook, 2023-28
- Opportunities
- Prepare for a privacy-centric ecosystem
- Digital video continues tremendous growth
- Streaming audio, made with real engagement
- Thoughtfully executed in-store video can enhance the consumer experience
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Market Size and Forecast
- The market faces hurdles, but will continue to innovate and grow
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- Figure 7: Total US revenues and fan chart forecast digital advertising, at current prices, 2018-28
- Figure 8: Total US revenues and forecast of digital advertising, at current prices, 2018-28
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Segment Performance
- After a huge spike, digital ad spend returns to pre-pandemic growth rates
- Figure 9: Breakout of total US digital ad spend, by segment, at current prices, 2019-23 (est)
- AI-enabled search will be a game-changer, for a while
- Figure 10: Total US search advertising revenues and fanchart forecast, at current prices, 2018-28
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- Figure 11: Total US search advertising revenues and forecast, at current prices, 2018-28
- Display will lose share in a cookie-less ad ecosystem
- Figure 12: Total US display advertising revenues and fanchart forecast, at current prices, 2018-28
- Figure 13: Total US display advertising revenues and forecast, at current prices, 2018-28
- Digital video will soon be the dominant channel for digital ad investment
- Figure 14: Total US digital video advertising revenues and fanchart forecast, at current prices, 2018-28
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- Figure 15: Total US digital video revenues and forecast, at current prices, 2018-28
- Podcasting is poised for growth – to a point
- Figure 16: Total US podcast advertising revenues and fanchart forecast, at current prices, 2018-28
- Figure 17: Total US podcast advertising revenues and forecast, at current prices, 2018-28
- Other formats are a perennial wild card
- Figure 18: Total US “other” digital advertising revenues and forecast, at current prices, 2018-28
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- Figure 19: Total US “other” digital advertising revenues and forecast, at current prices, 2018-28
- After a huge spike, digital ad spend returns to pre-pandemic growth rates
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Market Factors
- Marketers are preparing for a privacy-centric digital ad ecosystem
- AI will create a better search experience for consumers
- TikTok breathes new life into social as a viable channel for commerce
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Key Players
- After a 2H 2022 pullback, ad platforms show growth in 1H 2023
- Alphabet/Google is “bold and responsible” about introducing AI to search
- Meta makes its LLM open source for innovation’s sake, worrying competitors
- ByteDance, a hit with consumers, but a major concern for the government
- Alibaba restructures and looks for external capital to grow international ecommerce
- Amazon stays opaque about its sales and future projects, AI included
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Competitive Strategies and Market Opportunities
- Explore new ad targeting alternatives
- Capitalize on tremendous growth in digital video
- Streaming audio is an opportunity to reach niche and engaged consumers
- Catch financially struggling consumers’ eyes with deals and promotions
- Tech innovations give DOOH a burst of creativity and excitement
- Figure 20: CGI Barbie in Dubai, Instagram post, 2023
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The Digital Advertising Consumer – Fast Facts
- Consumers don’t consciously recall most digital advertising
- Most ads are viewed on a smartphone
- Half of consumers engage with digital ads, four in 10 find them irrelevant
- Ad repetition and deals are more influential than endorsements
- Shopping with AI-powered search is off to a good start
- Ad tolerance depends on what is being interrupted
- Digital out of home video is a nice change of pace, but still overwhelming
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Digital Ad Recall
- If not already, start planning for a post-privacy digital ad ecosystem
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- Figure 21: Digital ad recall in the last 7 days, 2020-23
- Reach cost-conscious consumers with deals and incentives
- Figure 22: Count of digital ad types recalled in the last 7 days, by financial status, 2023
- Include streaming audio in advertising mix
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- Figure 23: Digital audio ad recall in the past 7 days, by select demos, 2022-23
- Smartphones remain the device of choice for most consumers
- Figure 24: Digital ad recall in the last 7 days, by device, 2023
- Lack of user-level data may shift ad budgets away from digital channels
- Figure 25: Digital: Digital ad recall on a smartphone, by ad type, 2022-23
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Digital Ad Engagement
- As the sun sets on user-level data, marketers reassess its value
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- Figure 26: Digital ad engagement, 2023
- Men under 55 most apt to view ads as aids in the purchase process
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- Figure 27: Digital ad engagement, by gender and age, 2023
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How Digital Ads Influenced a Purchase/Consideration
- Repetition and deals work – but don’t forget relevancy
- Figure 28: Digital ad influence on purchase/consideration, 2023
- Age is a factor in what messaging influences a purchase
- Figure 29: Digital ad influence on purchase/consideration, by messaging type, by generation, 2023
- Relevancy and deals prompt the most clicks
- Figure 30: Reasons for digital ad interaction, 2023
- Make ads work harder by including more prompts to click
- Figure 31: TURF analysis, Reasons for digital ad interaction, 2023
- Repetition and deals work – but don’t forget relevancy
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AI Use in Online Shopping
- AI-powered search means more than just “terms” are relevant
- Figure 32: Experience with AI-powered search for shopping, 2023
- Interest in AI-powered search is more diverse than traditional tech
- Figure 33: Interest in using an AI-powered search engine when shopping online, by key demographics and index to all, 2023
- AI-powered search means more than just “terms” are relevant
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Attitudes toward Digital Ad Tolerance
- Consider the context and interference level of digital ads
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- Figure 34: Attitudes toward digital ad tolerance, 2023
- Tolerance is linked to engagement
- Figure 35: Attitudes toward digital ad tolerance, by gender and age, 2023
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Attitudes toward Digital Ad Intrusiveness
- Despite focus on personalization, online ads feel increasingly irrelevant
- Figure 36: Attitudes toward digital ad intrusiveness, 2023
- Follow growing social networks’ format and feel for contextual relevance
- Figure 37: “The relevancy of online ads … is worse than it used to be” – Any agree, by social networks visited daily, 2023
- Despite focus on personalization, online ads feel increasingly irrelevant
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Attitudes toward Digital Out-of-home Advertising
- Give consumers the choice to opt out of exposure to video ads
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- Figure 38: Attitudes toward digital out-of-home advertising, 2023
- Do in-store video thoughtfully, or not at all
- Figure 39: “I like to watch video ads in stores” – Any agree, by key demographics and index to all, 2023
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
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Appendix – The Consumer
- TURF analysis
- Figure 40: Table – TURF Analysis – Interaction with digital ads, 2023
- Methodology
- TURF analysis
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Appendix – The Market
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- Figure 41: Total US revenues and forecast for digital advertising, at inflation-adjusted prices, 2018-28
- Figure 42: Total US revenues and forecast for digital advertising, by segment, at current prices, 2018-28
- Figure 43: Total US revenue and forecast for search advertising, at inflation-adjusted prices, 2018-28
- Figure 44: Total US revenue and forecast for display advertising, at inflation-adjusted prices, 2018-28
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- Figure 45: Total US revenue and forecast for digital video advertising, at inflation-adjusted prices, 2018-28
- Figure 46: Total US revenue and forecast for other digital advertising, at inflation-adjusted prices, 2018-28
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