How Has The U.S. Online Advertising Market Grown Over The Last 10 Years, And What’s The Forecast Over The Next 5 Years?

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The U.S. advertising market has seen a marked shift in dynamics over the last decade due to the rise of digital advertising. In terms of component growth, non-digital revenues are expected to decline due to budget shifts towards digital. Among digital advertising channels, the increasing adoption of mobile devices is expected to cause a shift in spending towards mobile, away from desktop. Trefis highlights the historical and expected trend in the U.S. digital advertising market in the interactive dashboard How Has The U.S. Digital Advertising Market Grown In The Last Decade, And What’s The Forecast For The Next 5 Years? using data published by eMarketerIAB and PwC.

The U.S. online advertising market can be broken down into desktop and mobile internet markets. Desktop advertising revenue growth has slowed down on account of budget shifts to mobile ads. Desktop advertising revenue peaked at almost $39 billion in 2015 and since then have largely remained around $38 billion.

Mobile internet advertising revenue has seen significant growth due to the growing adoption of mobile devices. Mobile internet advertising revenue swelled to $70 billion in 2018 from $7 billion in 2013, growing at a CAGR of 58%. These revenues surpassed desktop advertising revenues in 2017.

The growth from mobile internet has been able to offset the relative weakness in desktop advertising, driving 20%+ y-o-y growth in the US digital advertising market over the last few years. Total advertising revenue reached $108 billion in 2018 from $43 billion in 2013, growing at a CAGR of 20%.

Going forward, we expect growth rates to moderate due to the base effect and higher ROI expectations from advertisers.

The desktop advertising revenue is likely to grow marginally over the next five years. We expect the desktop segment to remain largely stagnant over coming years, with revenues leveling off at $38 billion.

While mobile is expected to continue growing and drive the overall industry growth, some level of moderation is likely to occur. We expect the mobile segment to register a CAGR of 21% over 2019-2024 vs a CAGR of 58% seen during 2013-2018. We expect mobile advertising revenue to reach almost $237 billion by 2024.

Driven by mobile growth, the total US digital advertising segment is likely to grow at a CAGR of 16% over 2019-2024 versus 20% over 2013-2018. Trefis expects total online advertising revenue to reach $275 billion by 2024.

Do not agree with our forecast? Create your own forecast for the U.S. Online Advertising Market by changing the base inputs (blue dots) on our interactive dashboard.

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