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Contributors: Ross Benes, Audrey Schomer
Digital Ad Spending Keeps Rising While Ad Measurement
Debate Reaches New Stage
NOV 2021
Paul Verna
Insider Intelligence’s
Digital Advertising Trends
to Watch in 2022
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Copyright © 2021, Insider Intelligence Inc. All rights reserved. Page 3
Introduction
US digital ad spending is booming thanks to
increased investments in video, connected TV (CTV),
and ecommerce ads, as well as growing use of
programmatic channels. The health of the digital ad
market is also reflected in a pendulum shift toward
ad-supported video-on-demand (AVOD) services,
despite the continuing strength of subscription-based
services. Even addressable TV advertising is on a
growth path despite softness in the overall linear
TV market.
These positive changes notwithstanding, ad buyers and
sellers have been hard-pressed to solve the all-important
challenge of how to implement measurement standards
across linear TV and CTV. This is the biggest item on the
to-do list of an otherwise robust and growing industry.
Trend: Digital Ad Spending Blows
Away Our Pre-Pandemic Outlook
US digital ad spending will grow by nearly 50% in
the next four years. By 2025, the digital ad market will
top $300 billion—more than three-quarters of all media
spending. Digital has eclipsed all other forms of advertising,
but it has also outperformed our expectations several times
in recent years.
billions and % change
US Digital Ad Spending, 2020-2025
2020
$152.71
15.3%
2021
$211.20
38.3%
2022
$239.89
13.6%
2023
$270.73
12.9%
2024
$293.34
8.4%
2025
$315.32
7.5%
Digital ad spending % change
Note: includes advertising that appears on desktop and laptop computers as well as mobile
phones, tablets and other internet-connected devices, and includes all the various formats of
advertising on those platforms
Source: eMarketer, Oct 2021
270519 eMarketer | InsiderIntelligence.com
Even the hardest hit industries, travel and auto, have
rebounded. Those segments were the only ones to shrink
in 2020 as much of the country shut down, but this year,
they’ll be back in positive territory and stay there through
at least 2023—albeit with travel not expected to return
to pre-pandemic levels by 2023. Other location-sensitive
sectors like entertainment and retail grew faster in 2021
than they did in 2020. This indicates they’ve mostly left the
pandemic behind, despite lingering uncertainties over public
health and disruptions to ad spending from changes in
Apple’s privacy settings and supply chain issues.
The share of ad spending is tilting toward video, CTV,
and retail media. Video is gaining share thanks to a CTV
ad spending surge. By 2025, video will account for 33.5% of
US digital ad spending, nearly closing the gap with search’s
38.8%; by comparison, video will make up less than 30%
and search more than 40% this year. CTV’s share of video
will grow from 24.0% in 2021 to 32.7% in 2025. Meanwhile,
ecommerce channel ad spending will more than double
from $28.25 billion in 2021 to $63.81 billion in 2025. These
trends point to advertisers investing more money into upper- funnel video ads, even on retail media networks, which are
predominantly search- and performance-based.
In 2024, US digital advertisers will spend an extra
$64.69 billion over our pre-pandemic forecast for that
year. After lowering our estimates in mid-2020 in response
to the pandemic, each time we updated our forecast, we
raised it to incrementally higher levels. In 2025, digital ad
spending will represent 77.5% of total media spending, up
from 69.4% in 2021. This shift is partly the result of digital
transformation across media, but it also reflects a vibrant,
resilient ad market for buyers and sellers.
Prediction
Upper-funnel ads will drive digital ad spending gains.
Although search remains a larger contributor to ad spending
than video, the latter is where the budgets are shifting.
This is true across a range of platforms and publishers,
including CTV services, retailers, and even social networks,
where video ads sit higher in the purchase funnel than
other formats.