Description

Providing the most comprehensive and up-to-date information and analysis of the US Digital Advertising market including the behaviors, preferences, and habits of the consumer.

Digital advertising is an essential component of marketing strategies for large multinationals as well as smaller local brands. In an increasingly digital age, brands cannot afford to not have a digital presence and must supplement that presence with a sound digital marketing strategy.

COVID-19 drove consumers to increase their digital activity, including social media consumption. Due to increased use, about half of all consumers can recall a social media ad within the past three months. The digital ad industry has thrived due to the tracking and attribution capabilities of digital ads, allowing marketers to accurately measure their performance in the online space. The movement toward privacy, control, and a cookieless future could put unprepared marketers at a disadvantage.

Digital advertising revenue will end 2021 at an estimated $162 billion, a nearly 16% increase from 2020. The category will only become more important for brands as consumers continue to engage in digital activities moving forward, particularly in digital video advertising, which will play a significant and cost-effective branding opportunity for marketers. On account of the wide variety of digital channels available to consumers, brands will need to understand their audience’s digital behaviors and their responses to digital ads to maximize engagement and build out their brand awareness.

Read on to discover more about the US Digital Advertising consumer market, read our US Retail and eCommerce & the Impact of COVID-19 | One Year Later 2021 report, or take a look at our other Ecommerce and Online Shopping research reports.

Quickly understand

  • The impact of COVID-19 on consumer behavior and advertising.
  • Sales performance of US digital advertising, as a whole and by segment.
  • How consumers respond to various forms of digital ads they’ve encountered.
  • Attitudes toward digital advertising and key consumer segments.

Covered in this report

Brands include: Apple, Google, Disney, WarnerMedia, Disney+ HBO Max, Facebook, Nielsen, Amazon, YouTube, Alphabet, WhatsApp, Messenger, Instagram, Snapchat, TikTok, Oculus, Spotify, Pandora, Apple Music, Amazon Music, Twitter, The Trade Desk, Cars.com, Libra, Hulu, Peacock.

Expert analysis from a specialist in the field

This report, written by Buddy Lo, a leading analyst in the Technology and Consumer Electronics sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

In a world where digital behaviors and digital media consumption increased post COVID-19, it has never been more important for brands to have a strong, comprehensive, efficient digital marketing strategy for success in the marketplace. Digital activities are on the rise across the board, and brands that do not leverage the vast arrays of media sources and technology to reach their customers will lose out to their competitors who do.
Buddy Lo, Senior Technology Analyst
Buddy Lo
Sr. Technology and Consumer Electronics Analyst

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
            • Economic and other assumptions
              • COVID-19: US context
              • Executive Summary

                  • Top takeaways
                    • Market overview
                      • Figure 1: Total US digital advertising revenues and fan chart forecast, at current prices, 2016-26
                    • Impact of COVID-19 on digital advertising
                      • Figure 2: Short-, medium- and long-term impact of COVID-19 on digital advertising, 2021
                    • Opportunities and challenges
                      • Legislation poses potential risk
                        • Growth across all segments of digital advertising
                          • Figure 3: Breakout of US digital ad spend, by segment, at current prices, 2018-21
                        • Social media advertising has the highest recall and positive associations
                          • Figure 4: Perceptions of digital ads, 2021
                        • SVoD ads viewed more positively than pre-roll video ads
                          • Figure 5: Perceptions of video streaming and pre-roll video ads, by consumers who recall a video streaming or pre-roll video ad within the past three months, 2021
                        • Hyper Digital Users and Mainstream Digital Users are key consumer segments
                          • Figure 6: Consumer segments of attitudes toward digital advertising, 2021
                      • The Market – Key Takeaways

                        • Digital advertising industry thrives post COVID-19
                          • All digital marketing channels estimated for growth in 2021
                            • Digital video advertising growing the fastest
                              • Alternative digital advertising looks to expand
                                • Digital advertising needs to overcome issues with credibility
                                  • Privacy changes will bolster big tech’s role in digital advertising
                                  • Market Size and Forecast

                                    • Digital advertising thrives
                                      • Figure 7: Total US digital advertising revenues and fan chart forecast, at current prices, 2016-26
                                      • Figure 8: Total US sales and forecast of digital advertising revenues, at current prices, 2016-26
                                    • Impact of COVID-19 on digital advertising
                                    • Segment Performance

                                      • Both mobile and desktop platforms see gains in 2020
                                          • Figure 9: US digital ad revenue, by desktop and mobile, 2012-20
                                        • All digital advertising channels grew in 2020, increases expected for 2021
                                          • Figure 10: Breakout of US digital ad spend, by segment, at current prices, 2018-21
                                        • Search advertising offers efficiency for large and small firms
                                          • Figure 11: Total US search advertising revenues and fan chart forecast, at current prices, 2016-26
                                          • Figure 12: Total US search advertising revenues and forecast, at current prices, 2016-26
                                        • Display advertising grows with better targeting and tracking capabilities
                                          • Figure 13: Total US display advertising revenues and fan chart forecast, at current prices, 2016-26
                                          • Figure 14: Total US display advertising revenues and forecast, at current prices, 2016-26
                                        • Digital video benefits greatly from the shift to in-home digital entertainment
                                          • Figure 15: Total US digital video advertising revenues and fan chart forecast, at current prices, 2016-26
                                          • Figure 16: Total US digital video advertising revenues and forecast, at current prices, 2016-26
                                        • Alternative digital ads present new opportunities for brands
                                            • Figure 17: Total US “other” digital advertising revenues and fan chart forecast, at current prices, 2016-26
                                            • Figure 18: Total US digital video advertising revenues and forecast, at current prices, 2016-26
                                        • Market Perspective

                                          • Credibility a concern for digital marketers
                                            • Figure 19: Psychographics – Attitudes toward advertising, 2021
                                        • Market Factors

                                          • Legislation looms as Sword of Damocles over digital marketing
                                            • Apple and Google grant users additional privacy control
                                              • Cookieless practices bolster big tech’s space in digital advertising
                                                • Digital marketing booms despite drop in economic activity following pandemic
                                                  • Nielsen loses MRC accreditation
                                                    • Growth in younger demographics increases the value of digital channels
                                                    • Companies and Brands – Key Takeaways

                                                      • Alphabet’s Google search revenues generated nearly $150 billion in 2020
                                                        • Amazon’s advertising arm a major player in the digital ad space
                                                          • Facebook’s family of services has 2.6 billion active users
                                                            • Targeted digital video advertising has major potential for growth
                                                            • Market Share

                                                              • Alphabet forecasts significant search revenue growth in 2021
                                                                • Figure 20: Alphabet advertising revenues, by alphabet advertising properties, 2017-21
                                                              • Amazon’s advertising sector sees high year over year growth
                                                                • Figure 21: Amazon sales of advertising services and other service offerings, 2016-21
                                                              • Facebook
                                                                • Figure 22: Facebook advertising revenues, 2016-21
                                                              • Snapchat
                                                                • Figure 23: Snapchat revenues, 2016-21
                                                              • Spotify
                                                                • Figure 24: Spotify total and ad-supported revenues, 2016-21
                                                              • Twitter
                                                                • Figure 25: Twitter advertising services revenues, 2016-21
                                                              • The Trade Desk
                                                                • Figure 26: The Trade Desk revenues, 2016-21
                                                            • Market Opportunities

                                                              • More targeted digital video advertising should play a growing role
                                                                • Cars.com launches Fuel In-Market Video
                                                                  • Influencers can help brands raise awareness and credibility
                                                                    • Video gaming well positioned for sizeable role in digital advertising
                                                                      • Facebook’s Libra cryptocurrency could incentivize users to stay within Facebook’s network
                                                                      • The Consumer – Key Takeaways

                                                                        • Digital media consumption widespread
                                                                          • Social media ads have highest recall
                                                                            • Unsubscribing or marking emails as read without reading are issues for email marketing
                                                                              • Podcast ads and pre-roll video ads have highest risk for skipping
                                                                                • Podcast ads have positive perceptions among listeners
                                                                                  • Consumers most comfortable sharing their email address with marketers
                                                                                    • Personalization and entertainment are winning themes
                                                                                      • Mainstream Digital Users and Hyper Digital Users are key consumer segments
                                                                                      • Media Consumption

                                                                                        • Nearly all consumers watch or listen to digital media
                                                                                          • Figure 27: Media consumption in an average month, 2021
                                                                                        • Digital content draws much younger audience
                                                                                          • Figure 28: Age distribution of content consumers, by media content, 2021
                                                                                        • Cable/satellite network TV has largest share of exclusive audience
                                                                                          • Figure 29: Sole media usage, 2021
                                                                                          • Figure 30: Number of media sources consumed in an average month, by media type consumed, 2021
                                                                                        • Black consumers more likely to use low-cost services
                                                                                          • Figure 31: Media consumption, by race and Hispanic origin, 2021
                                                                                      • Digital Ads Recalled

                                                                                        • Half of consumers recall a social media ad within the past three months
                                                                                          • Figure 32: Digital ads recalled within the past three months, 2021
                                                                                        • Age and digital behaviors drive digital ad recall
                                                                                          • Figure 33: Digital ads recalled within the past three months, by age, 2021
                                                                                          • Figure 34: Digital ads recalled within the past three months, by media consumed, 2021
                                                                                      • Digital Ad Activity

                                                                                        • Demographics impact ad exposure as well as attitudes
                                                                                          • Figure 35: Age and income breakdown of digital ad activity survey respondents, 2021
                                                                                        • One third of email ad recipients have unsubscribed
                                                                                          • Figure 36: Email ad actions, 2021
                                                                                        • Nearly equal share of video ad respondents interacted with or skipped the video ad
                                                                                          • Figure 37: Digital video ad actions, 2021
                                                                                        • Two in three pre-roll video viewers have skipped a video-based ad
                                                                                          • Figure 38: Digital video ad actions, by video-based ads recalled within the past three months, 2021
                                                                                        • One in five made a purchase due to an audio ad
                                                                                          • Figure 39: Digital audio ad actions, 2021
                                                                                        • Podcast listeners more likely to skip or fast-forward through ads
                                                                                          • Figure 40: Digital audio ad actions, 2021
                                                                                      • Perceptions of Digital Ads

                                                                                        • Ad exposure influences perceptions
                                                                                          • Figure 41: Perceptions of digital ads, 2021
                                                                                          • Figure 42: Perceptions of digital ads, by those who recall digital ads over the past three months, 2021
                                                                                        • Social media ads perceived fairly positively compared to other digital ads
                                                                                          • Figure 43: Perceptions of social media ads, by consumers who recall a social media ad within the past three months, 2021
                                                                                        • Email ads most likely to be considered a security risk
                                                                                          • Figure 44: Perceptions of email ads, by consumers who recall an email ad within the past three months, 2021
                                                                                        • Video streaming ads viewed more favorably than pre-roll video ads
                                                                                          • Figure 45: Perceptions of video streaming ads, by consumers who recall a video streaming ad within the past three months, 2021
                                                                                        • Audio streaming ads less likely to stand out among audio-based ads
                                                                                          • Figure 46: Perceptions of audio streaming ads, by consumers who recall an audio streaming ad within the past three months, 2021
                                                                                        • Pre-roll video ads widely considered a nuisance
                                                                                          • Figure 47: Perceptions of pre-roll video ads, by consumers who recall a pre-roll video ad within the past three months, 2021
                                                                                        • Podcast ads present strong positive associations among listeners
                                                                                          • Figure 48: Perceptions of podcast ads, by consumers who recall a podcast ad within the past three months, 2021
                                                                                      • Sharing Personal Information

                                                                                        • Consumers most comfortable sharing email with brands
                                                                                          • Figure 49: Personal information sharing, 2021
                                                                                        • Selling data is a major pain point for consumers
                                                                                          • Figure 50: Ways to increase comfort sharing personal information, 2021
                                                                                        • Millennials most comfortable sharing various types of personal information
                                                                                          • Figure 51: Personal information sharing, by generation, 2021
                                                                                          • Figure 52: Ways to increase comfort sharing personal information, by generation, 2021
                                                                                        • Black consumers most willing to share personal info
                                                                                          • Figure 53: Personal information sharing, by race and Hispanic origin, 2021
                                                                                          • Figure 54: Ways to increase comfort sharing personal information, by race and Hispanic origin, 2021
                                                                                      • Attitudes toward Digital Advertising

                                                                                        • Consumers agree ads are necessary, but they don’t like it
                                                                                          • Figure 55: Attitudes toward digital advertising – Auto-play ads, pre-roll ads, 2021
                                                                                        • Personalization and entertainment are winning themes for consumers
                                                                                          • Figure 56: Attitudes toward digital advertising – Personalization and entertainment, 2021
                                                                                          • Figure 57: Attitudes toward digital advertising – Personalization and entertainment, by age, 2021
                                                                                        • Social media is critical for new brands and local businesses
                                                                                          • Figure 58: Attitudes toward digital advertising – Social media and local/new businesses, 2021
                                                                                        • Mobile ads have a wider audience, but desktop can still execute on sales
                                                                                          • Figure 59: Attitudes toward digital advertising – Smartphone ads, 2021
                                                                                      • Consumer Segmentation – Attitudes toward Digital Advertising

                                                                                        • Four consumer segments identified based on attitudes toward digital advertising
                                                                                            • Figure 60: Consumer segments of attitudes toward digital advertising, 2021
                                                                                          • Mainstream and Hyper Digital Users have highest digital media use
                                                                                              • Figure 61: Media consumption in an average month, by consumer segments of attitudes toward digital advertising, 2021
                                                                                              • Figure 62: Breakdown of number of media types consumed, by consumer segments, 2021
                                                                                            • Mainstream Digital Users (23%)
                                                                                              • Characteristics
                                                                                                  • Figure 63: Profile of Mainstream Digital Users, 2021
                                                                                                • Opportunities
                                                                                                  • Figure 64: Digital video ad actions, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                • Hyper Digital Users (27%)
                                                                                                  • Characteristics
                                                                                                    • Figure 65: Profile of Hyper Digital Users, 2021
                                                                                                  • Opportunities
                                                                                                      • Figure 66: Attitudes toward digital advertising, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                      • Figure 67: Video games played in the past three months, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                      • Figure 68: Video game advertising, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                    • Ambivalent Users (28%)
                                                                                                      • Characteristics
                                                                                                        • Figure 69: Profile of Ambivalent Users, 2021
                                                                                                      • Opportunities
                                                                                                        • Digital Ad Avoiders (22%)
                                                                                                          • Characteristics
                                                                                                            • Figure 70: Profile of Digital Ad Avoiders, 2021
                                                                                                          • Opportunities
                                                                                                            • Figure 71: Digital ads recalled within the past three months, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                            • Figure 72: Email ad actions, by consumer segments of attitudes toward digital advertising, 2021
                                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                                          • Data sources
                                                                                                            • Sales data
                                                                                                              • Forecast
                                                                                                                • Consumer survey data
                                                                                                                  • Abbreviations and terms
                                                                                                                    • Abbreviations
                                                                                                                      • Terms
                                                                                                                      • Appendix – The Market

                                                                                                                          • Figure 73: Total US sales and forecast of digital advertising revenues, at inflation adjusted prices, 2016-26
                                                                                                                          • Figure 74: Total US sales and forecast of search advertising revenues, at inflation adjusted prices, 2016-26
                                                                                                                          • Figure 75: Total US sales and forecast of display advertising revenues, at inflation adjusted prices, 2016-26
                                                                                                                          • Figure 76: Total US sales and forecast of digital video advertising revenues, at inflation adjusted prices, 2016-26
                                                                                                                          • Figure 77: Total US sales and forecast of other digital advertising revenues, at inflation adjusted prices, 2016-26
                                                                                                                          • Figure 78: Breakout of US digital ad spend, by segment and year over year percentage change, 2016-21

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