Advertising Services Market

Advertising Services Market Outlook (2022-2032)

The global advertising services market is estimated at US$ 665 billion in 2022 and is further projected to expand at a CAGR of 7.2% to turn into a trillion-dollar market by the end of 2032.

Ad services accounted for approximately 30% share of global marketing spend by all enterprises in 2021. The proportion of ad spend is further anticipated to swell to 45% of overall marketing budgets within the next ten years.

Report Attributes	Details
Advertising Services Market Size (2021A)	US$ 620 Billion
Estimated Market Value (2022E)	US$ 664.6 Billion
Forecasted Market Value (2032F)	US$ 1,332 Billion
Global Market Growth Rate (2022-2032)	7.2% CAGR
North America Market Share (2021)	~47%
East Asia Market Growth Rate (2022-2032)	~8.4% CAGR
United States Market Growth Rate (2022-2032)	~6.9% CAGR
Market Share of Top 5 Companies	~10%
Key Companies Profiled	WPP Accenture Interactive Black Propeller BlueFocus Communication Group Deloitte Digital Funnel Boost Media Hakuhodo Hotspex Media Interpublic Group of Cos. Jives Media Madison Communication Pvt. Ltd. McCann Erickson India Pvt. Ltd. Mediaplus Group Omnicom Group Publicis Groupe SeedX Inc. The Remnant Agency VCCP Zerotrillion Dentsu Inc.

Growing Business Spending on Advertising across the World

Advertising plays an essential role in driving business growth. It amplifies the business effort and helps an organization reach the right audience and convert potential customers into paying customers.

To stay ahead in the competition and retain the existing consumer base, organizations significantly invest in advertising services, which is expected to.

• For instance, the average spending of small businesses that use Google Ads as part of their online advertising strategy is between US$ 9,000 and US$ 10,000 per month.

Moreover, direct advertising presented in children's eyes and ears has dramatically increased as a result of the expansion of advertising channels targeting kids and the commercialization of kids' media use.

• As per the American Psychological Association, advertisers are thought to spend more than US$ 12 billion annually to target the young market, and kids watch more than 40,000 commercials annually.

These numbers show a sharp rise above those from the 1970s. As such, increasing business spending on advertising is driving market growth.

• Short Term (2022 to 2025): Post-COVID, consumers started spending more time on smartphones & social media platforms, which created a lucrative opportunity for online advertising services agencies.
• Medium Term (2025-2028): The United States and Asia Pacific are expected to witness a high number of start-ups and foreign company establishments. To expand, companies may seek the adoption of advertising services to gain a competitive advantage in the market.
• Long Term (2028-2032): Growing digitalization is expected to leverage the demand for online advertising services more than physical ad services. Advertising will become a core activity for every small & medium organization to deal with intense competitive rivalry in the market.

From 2017 to 2021, the global advertising agency services market registered a CAGR of 6.7%, as per a new study by Fact.MR, a market research and competitive intelligence provider. Between 2022 and 2032, the market is projected to exhibit growth at 7.2% CAGR.

Market share analysis of advertising agency services based on end-use industry and region. Under the end-use industry segment, the consumer goods sub-segment dominates with 18% market share in 2022.

Why is Demand for Advertising Service Platforms Increasing?

“Growing Popularity of Social Media Advertising”

The growing popularity of social media advertising is one of the major factors that will push market growth in the forthcoming period. Social media has changed from its original purpose of promoting social interaction and content sharing to now offering interactive avenues for both consumers and corporations. In addition to changing how Internet users communicate with one another, platforms such as Facebook, YouTube, Instagram, and Twitter have also revolutionized the way marketing and advertising communications reach highly relevant target audiences.

Social media's influence on consumer behavior extends from highlighting the importance of word-of-mouth recommendations to fostering stronger customer-business ties. Thus, the growing popularity of social media advertisements across the world is propelling market growth.

“Increasing Trend of Digital Advertising Worldwide”

As the Internet era has progressed, increased on-demand services from digital advertising firms have caused a shift in consumer focus away from traditional forms of media and toward more digital ones. Today, despite visiting a physical store, consumers are looking for products on online platforms, reading consumer reviews, and accessing the prices of products online. Through this, advertising agencies promote the customer’s business, products, and services to generate high brand awareness, sales, and more.

What Do Advertising Services Providers Need to Keep in Mind?

“Presence of Strict Regulations Related to Advertising”

The presence of strict regulations on advertising that distorts the market by propagating false or deceitful claims is a major factor hampering market growth. Promises can persuade consumers to acquire products or services that they otherwise would not have opted to buy if they had not been misled by deceptive advertising. If this occurs, intervention by governments may be necessary to restore the market's integrity.

To stop false and deceptive advertising, it may take a variety of measures, such as targeted legal action and the creation of legislation to address practices that mislead consumers about the tangible qualities of products and services on the market.

For instance, The Federal Trade Commission (FTC) is established in the United States to oversee policies intended to safeguard consumers against unfair or misleading acts. The FTC seeks to prevent advertisers from making false, erroneous, or otherwise misleading advertising claims. The FTC can issue orders, enforceable through the courts, forcing marketers to stop their misleading or deceptive advertising when illegal statements are discovered.

“Growing Consumer Awareness about Digital Advertising”

While online advertisements used to be effective at getting users to click, over time, people developed greater resistance to their allure. Many Internet users deliberately block advertisements using browser extensions. Many others just decide to disregard them. Some ad formats are completely unpopular because they lead to distractions or make it difficult for users to access the required content fast. For example, some viewers will simply monitor the countdown clock while waiting to bypass the video ad and go straight to their film.

Moreover, the possibility of tracking down target customers is expected to be low when customers use specific search engines or social networks, which will hamper the online advertising process.

Country-wise Insights

How is Surging Interest in Mobile Advertisements Driving Market Growth in the United States?

The United States advertising agency services market is estimated to evolve at a CAGR of 6.9% over the decade.

In the United States, advertisers have increasingly shown their interest in mobile advertisements due to the growing popularity of mobile devices and the proceeding shift from desktop computers.

• Smartphone users in the United States were around 274.1 million in 2018, which grew to 302 million by 2021.

With the rising usage of smartphones and the high penetration of the Internet in the United States, online shopping has gained significant popularity. This factor is attributed to the high demand for advertising services in the e-Commerce industry in the United States.

Why is the China Advertising Services Market Surging Ahead?

In China, advertising was adopted to promote majorly nonagricultural products and services. However, China’s moving focus to the manufacturing & service sector from agriculture has stimulated the demand for advertising services companies significantly. As a result, people and organizational spending on advertising have seen significant growth in the last few years in China.

• For instance, China’s total spending in 2021 was around US$ 90 to 125 billion.

Moreover, the Chinese population has seen a considerable shift in interest towards mobile applications, which has created a potential growth opportunity for in-app online advertising in the country.

The China advertising services agencies market is projected to progress at a CAGR of 8.5% through 2032.

Category-wise Insights

What Allows the Consumer Goods Segment to Dominate the Market?

The consumer goods segment accounts for a share of 18% in 2022 and is expected to be worth US$ 689.23 billion by 2032.

The consumer goods sector is highly competitive where consumer behavior plays an essential role in the sale of products. Marketers design advertisements through understanding consumer behavior and accordingly make advertisements for the desired impact. Surging investments by consumer goods companies in advertisements are expected to stimulate the demand for advertising services in the years ahead.

• Leading companies in India dealing in consumer goods are expected to spend around 12% more on year-on-year advertisement and promotion of products.
• In 2021, around 71% of CPG marketers showed interest in investments in connected TV advertisements and around 59% showed interest in spending on social media advertisements.

Will We See the Dominance of Social Media Advertisements?

The social media advertisement segment accounts for a market share of 25% in 2022.

Social media advertisement is one of the popular categories of digital marketing, which utilizes social platforms such as Facebook, Twitter, and Instagram to deliver paid ads to target customers.

Adoption of virtual reality and augmented reality on social media platforms is one of the trending advertisement strategies being adopted by e-Commerce companies these days. It allows users to try-on products before buying them, which enhances the client experience.

Influencer collaboration is one of the fastest-growing social media advertising tactics. Brands collaborate with influencers to promote the content created by them that endorses their brands.

Competitive Landscape

Prominent advertising service providers are WPP, Accenture Interactive, Black Propeller, BlueFocus Communication Group, Deloitte Digital, Funnel Boost Media, Hakuhodo, Hotspex Media, Interpublic Group of Cos., Jives Media, Madison Communication Pvt. Ltd., McCann Erickson India Pvt. Ltd., Mediaplus Group, Omnicom Group, Publicis Groupe, SeedX Inc., The Remnant Agency, VCCP, Zerotrillion, and Dentsu Inc.

The global advertising agency services market is expected to be highly competitive with the adoption of various strategic initiatives such as partnerships and acquisitions by key market players.

For instance :

• In September 2019, WPP and InMobi Group partnered to establish unique benefits for marketers along with simplifying complexity for Indian marketers.
• In April 2022, Imagine and Operative Media joined hands to establish a cloud-native platform that simplifies advertising across linear and digital channels.
• In September 2019, Omnicom Precision Marketing Group acquired a major stake in Smart Digital GmbH. The acquisition is aimed to expand the company’s service offerings in digital marketing and provide real-time customer interactions to provide greater ROI to organizations with prominent marketing services.

Fact.MR has provided detailed information about the providers of advertising services positioned across regions, sales growth, and product offering expansion, in the recently published report.

Segmentation of Advertising Services Industry Research

• By Mode of Service :

  • Digital
    • Social Media Advertising
    • Search Media Advertising
    • Programmatic Media Advertising
  • Traditional
    • Radio Advertising
    • Print Advertising
    • Television
    • Outdoor
    • Others

• By End-use Industry :

  • Retail
  • Consumer Goods
  • Financial Services
  • Energy & Manufacturing
  • Technology
  • Travel & Tourism
  • Media & Entertainment
  • Healthcare
  • Automotive
  • Others

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • MEA