Global AdTech Market Dynamics

Market Drivers

AdTech Market Report Coverage

Increasing digitalization of advertising budgets drives the growth of the AdTech market. Retail spending on digital advertising is projected to reach $73.55 billion in 2023. Retail, financial services, and CPG sectors are expected to account for 54.3% of total US digital ad spending in the same year. This surge in digital advertising expenditure is expected to propel the AdTech market in the coming years. Furthermore, the expansion of digital advertising channels, such as mobile and connected TV, further accelerates market growth. For example, as of 2023, online ads delivered through search engines, popular social media platforms, and other digital channels account for 87% of total advertising in China. With an increasing number of people shopping online, industry experts predict that this figure will rise to 90% by 2027. This expansion of advertising channels leads to heightened demand for AdTech solutions.

However, privacy concerns and regulatory changes impacting data usage pose challenges to the growth of the AdTech market. For instance, a survey on digital usage in China revealed that one in five respondents faced challenges regarding the misuse of their digital data in 2023. As consumers become more aware of their privacy rights, they demand greater transparency and control over how their data is collected and used for advertising purposes. This has led to the implementation of stricter regulations such as GDPR and CCPA, which limit the ability of AdTech companies to track users without their explicit consent. These regulatory hurdles regarding data usage could hinder the growth of the AdTech market in the coming years.

On the other hand, the expansion of emerging advertising formats like audio and digital out-of-home (DOOH) presents significant opportunities in the AdTech industry. For example, in 2023, DOOH advertising is expected to experience an increase in creative formats. Dynamic creative optimization (DCO) provides real-time customization that aligns with customer mindsets, while audio-based DOOH and anamorphic 3D videos offer newer and more immersive experiences. These innovative advertising formats increase engagement and provide immersive experiences, thereby promoting the AdTech market significantly.

AdTech Market Segmentation

The global AdTech market segmentation is based on solution, enterprise size, platform, advertising type, industry vertical, and geography.

• Demand-side Platforms (DSPs)
• Data Management Platforms (DMPs)
• Supply-side Platforms (SSPs)
• Ad Networks
• Others

According to AdTech industry analysis, the demand-side platforms (DSPs) segment dominated the market in 2022. In recent years, the DSP industry has experienced radical growth, driven by factors such as increased use of programmatic advertising, the expansion of digital channels, and advancements in data analytics and targeting technology. Additionally, marketers are seeking more efficient ways to reach their target audiences. For instance, Google LLC extended its CTV inventory in the video 360 demand-side platform and CTV inventory to improve CTV advertising. The company also added new features to Display and Video and Google Marketing Platform in May 2022. Consequently, this expansion is expected to lead to increased demand for DSPs in the coming years.

• Large Enterprises
• SMEs

In terms of enterprise size, the large enterprise segment is expected to dominate the market in 2022. This trend is fueled by the growing digitalization of advertising budgets and the complexity of marketing plans within multinational organizations. One of the primary drivers of growth in the large enterprise segment is the demand for advanced analytics and targeting capabilities offered by AdTech solutions. Large organizations typically have vast amounts of customer data at their disposal, and they require robust analytics solutions to effectively leverage this data for targeted advertising campaigns.

• Web
• Mobile
• Others

According to the AdTech market forecast, the mobile segment is poised to experience significant growth in the coming years. With customers spending more time on their mobile devices, advertisers are increasingly focusing on mobile advertising. For example, in January 2023, India had 467.0 million social media users, representing 32.8 percent of the population. Additionally, India had 1.10 billion active cellular mobile connections in early 2023. This trend has led to a surge in demand for AdTech solutions tailored specifically for mobile platforms, including mobile ad networks, mobile demand-side platforms (DSPs), and mobile analytics software. One of the primary drivers of growth in the mobile segment is the rapid expansion of mobile app usage. Consequently, the mobile segment of the AdTech industry is experiencing significant growth

• Programmatic Advertising
• Display Advertising
• Search Advertising
• Mobile Advertising
• Native Advertising
• Email Marketing
• Others

Based on the advertising type, the programmatic advertising segment is expected to witness significant growth in the coming years. One of the key drivers of this growth is the increased use of data-driven advertising methods by advertisers and marketers. For example, AI has enhanced marketers' ability to analyze large volumes of data, personalize content, predict consumer behavior, and optimize campaigns. By 2023, it is projected that more than 61% of marketers will have incorporated AI into their marketing activities. Furthermore, programmatic advertising enables marketers to leverage vast amounts of data to segment their target audiences based on demographics, interests, and behaviors. This allows them to deliver highly relevant and personalized ads at scale, driving the growth of the programmatic advertising segment.

• Media and Entertainment
• Education
• BFSI
• Retail and Consumer Goods
• Healthcare
• IT and Telecom
• Others

In terms of industry verticals, the retail and consumer goods segment has experienced significant growth in recent years. This growth is fueled by the increasing digitalization of purchasing habits and heightened competition among businesses to capture consumers' attention online. With more customers turning to online purchases, the retail and consumer goods industries are making substantial investments in digital advertising to enhance brand visibility. For example, digital advertising spending is projected to reach INR 31,500 crore in FY 2023-24, with further growth expected to INR 41,000 crore by the end of Circa 2024. This upward trend has led to a sharp increase in demand for AdTech solutions tailored to the needs of the retail and consumer goods industries.

AdTech Market Regional Outlook