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How does online advertising market develop?
Year by year we are observing increasingly dynamic expansion of the digital advertising market. What is the source of this growth? What are the forecasts for the coming years?
The online advertising market is getting stronger, while consumption boom seems to be endless. Every year new opportunities, trends and more innovative tools within a broadly understood digital occur. We do not only need to use possibilities of the present, but also get to know technologies of the future.
Increase in spending on paid search
The paid search segment has been developing dynamically for a couple of years, providing advertisers with advanced tools using artificial intelligence to optimise conversion, targeting and messages. This is largely thanks to the e-commerce industry where brands integrate their activities with search engines. The commercial sector has increased its investment by as much as 25%, while the share of online advertising is the highest for industries tightly connected with the Internet, such as computers and audio video, travel and tourism, clothing and accessories, automotive, finances and leisure time.
Programmatic as a driving force of the Polish online advertising market
The source of the advertising market growth in Poland is programmatic, namely a model in which the display of a given advert is determined by dedicated automated platforms. According to the Programmatic Marketing Forecasts report published by a media agency Zenith in 2019, spending on advertising purchased in the programmatic model in Poland will account for 31% of total online advertising expenditure. By 2020 the value will have grown by 46%. The trend results from many factors, among others, an increase in the video advertising segment, scale of e-commerce activities and interest of smaller businesses in this auction model.
Local companies change the advertising market
A considerable share in the entire advertising market growth is attributed to smaller companies, such as local restaurants or online stores. The advertising market is wide open, offering intuitive tools for campaign management, ad creation, geotargeting or simple segmentation. Social media, Google or even web push notification – push notifications, which to some extent displace traditional email marketing, provide them with more and more possibilities, translating into immense conversion level in the media. Web push notification is based on the state-of-the-art machine learning technologies, becoming a strategic element of communication with recipients.
Mobile is growing stronger
In the first six months advertising spending in the mobile sector grew by over 23%, while the share of advertising on mobile devices exceeded a third of the total value of digital budgets. The increase results e.g. from a high growth rate of social media advertising expenses. After all, consumers use Facebook or Instagram mainly on smartphones or tablets.
Higher advertising spending in social media
Since early 2019 the highest growth in advertising revenue has been generated by Facebook, though the growth rate has slowed down and the hit rate for the website is decreasing. Therefore, the revenue increase is implemented by greater saturation with ads and thanks to introducing them to Messenger.
Forecast for the global advertising market
In 2018, global spending on online advertising was higher than previously forecast. It is predicted that by the end of 2019 the global advertising market will have grown by 4.7%, while in 2020 – by 4.6%. This is largely thanks to increased spending on online video, programmatic and social media ads. According to the forecasts, the highest growth will be seen in Central and Eastern Europe – by 6.3% on average by 2021. It is worth paying attention to new technologies which enforce new advertising trends, e.g. to include chatbots, web push notification or even Virtual Reality.