Smart Advertising Market

Smart Advertising Market Outlook 2031

The global smart advertising market size was USD 1.3 billion in 2022 and is expected to reach USD 5.2 billion by 2031, expanding at a CAGR of 16.6% during the forecast period, 2023 – 2031. The growth of the market is attributed to the rapid expansion of wireless internet access infrastructure and the availability of video content management tools globally.

Increasing digitalization is propelling the smart advertising market. Advertisers are leveraging smart advertising solutions to reach their target audience effectively, due to the growing number of internet users and the shift towards digital platforms. The rapid development of technologies such as artificial intelligence, machine learning, and big data analytics has enabled sophisticated and targeted advertising strategies. For instance,

• According to a published report in August 2023, global advertising spending has registered consistent growth since 2010 (excluding 2020) and is projected to reach approximately USD 856 billion in 2023. The internet remains the most significant medium for advertisers, representing 62% of total media ad spend in 2022, with an anticipated growth of 8.4% in 2023.

Get Free Sample Report

Personalized advertising for enhanced targeting capabilities is propelling the market. Smart advertising allows for personalized and tailored ad experiences to consumers, based on user preferences, behavior, and demographics. This customization improves engagement and conversion rates. These platforms utilize data-driven insights to identify and target specific audience segments with relevant ads, leading to high ad effectiveness and ROI.

The research report finds that the COVID-19 pandemic had a significant impact on the smart advertising market. The economic uncertainty and budget cuts caused by the pandemic have led to a decrease in ad spend, resulting in reduced revenue for smart advertising platforms and publishers. The pandemic has accelerated the shift towards digital platforms, with more people spending time online.

This presents an opportunity for smart advertising platforms to reach a large audience and deliver targeted and personalized ad experiences. It has led to a surge in e-commerce sales, creating opportunities for smart advertising platforms to target consumers with relevant ads and drive online sales. For instance,

• As per the CMO survey conducted in September 2022, it was found that the significance of marketing in organizations has grown in over half of all companies during the pandemic. The survey revealed that marketing budgets as a percentage of revenues have returned to pre-pandemic levels. This reflects a notable 12.3% growth in revenues over the past year, as compared to the mere 0.3% increase reported in February 2021 at the peak of the pandemic.

Artificial Intelligence (AI) Impact on Smart Advertising Market

Artificial Intelligence (AI) has a significant impact on the smart advertising market. AI-powered solutions in smart advertising have become critical during the pandemic, as they enable advertisers to analyze data, optimize campaigns, and deliver personalized ad experiences at scale.

• On December 7, 2023, a press release by BrandEquity Economic Times India reported that the Digiplus Fest 2023 hosted a panel discussion on digital transformation, where the pervasive role of AI in personalization and data analysis was discussed. The discussion specifically focused on leveraging AI in phygital marketing.

Additionally, Digital Out-of-Home (DOOH) companies now recognize potential customers and offer personalized advertising content, due to technological advances in areas such as artificial intelligence (AI), sensor fusion, machine learning (ML), and big data analytics. This technology empowered DOOH companies to analyze vast amounts of customer data to determine how well their advertisements are doing.

Smart Advertising Market Dynamics

Major Drivers

Advertisers are increasingly focusing on using a hyper-targeted advertisement model to offer customized content to specific customer segments, which is expected to drive the market. Advertisers recognize the value of delivering personalized and relevant content to their target audience. The use of smart advertising allows for precise targeting based on user preferences, behavior, and demographics. This hyper-targeted approach enhances engagement, conversion rates, and overall advertising effectiveness. For instance,

• In September 2023, Google AdMob, introduced mobile advertising solutions that provide business leaders with access to advanced analytics and reporting features. With AdMob, companies receive real-time alerts for changes in metrics such as CPM and impressions. Additionally, app creators utilize the Google Ad environment to gain insights into the specific ad placements for their apps.

Rapidly expanding wireless internet networking infrastructure and the global availability of video content management systems are contributing to the growth of the corporate sector in the market. The proliferation of wireless internet networking infrastructure, such as 5G, provides fast and reliable connectivity, enabling seamless delivery of smart ads across various devices and platforms. This expansion creates opportunities for advertisers to reach a wide audience.

Additionally, the availability of video content management systems facilitates the creation, distribution, and management of video ads, which have proven to be highly engaging and effective. This accessibility to video content management systems drives the adoption of smart advertising solutions in the corporate sector.

Existing Restraints

Government regulations aimed at protecting consumer data privacy and ensuring data security are expected to hamper the market. Government regulations governing data privacy and security, such as the European Union's General Data Protection Regulation (GDPR), pose challenges to the market. Compliance with these regulations, such as obtaining explicit consent for data collection and usage, limit the amount of data available for targeting and personalization.

Emerging Opportunities

Growing digital audience is expected to create lucrative opportunities in the market. The increasing number of internet users and the adoption of digital devices present a vast and expanding audience for smart advertising, offering opportunities for brands to reach and engage with a large customer base.
Cross-channel integration is expected to create opportunities in the market.

The ability to integrate smart advertising across various channels allows for a cohesive and consistent brand presence, enabling advertisers to reach consumers at different touchpoints and maximize their marketing impact.

Scope of the Smart Advertising Market Report

The report on the global smart advertising market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Smart Advertising Market Segment Insights

Component Segment Analysis

Based on component, the global smart advertising market is divided into hardware, software, and services. The hardware segment accounts for a key share of the market and is anticipated to expand at a rapid pace during the forecast period. Increased installation of outdoor digital billboards, indoor digital posters, and virtual kiosk networks by (Digital Out Of Home) DOOH media companies around the world is expected to boost the segment over the forecast period. For instance,

• In August 2023, according to a published report, mobile advertising spending in the US is anticipated to grow in the coming years. Mobile ad spending in the US is projected to gain nearly USD 25 billion in 2023.

DOOH media companies are concentrating on combining high-definition cameras and advanced sensors, such as vibration, smoke, and proximity sensors, with traditional digital displays to increase the delivery of personalized advertisement content. These hardware systems, which are driven by Machine Learning (ML) and Artificial Intelligence (AI), play a key role in identifying and categorizing customers based on a variety of factors such as gender, age, mood, and place. These factors are crucial in propelling the hardware segment.

Get Free Sample Report

Product Segment Analysis

On the basis of product, the global smart advertising market is divided into digital poster, digital billboard, and others. The digital billboard segment accounts for a key share of the market and is anticipated to expand at a rapid pace during the forecast period. Increased emphasis on replacing traditional billboards with digitalized billboards that have wireless connectivity and a range of sensors boosted the market share of the digital billboard segment.

These smart billboards are a key component of several smart city projects and generate a significant amount of revenue for local governments. The digital poster segment is expected to grow at a rapid pace. Digital posters are increasingly used in public and private spaces, such as business centers, community centers, and shopping malls.

Furthermore, over the next six years, the market is expected to expand, due to the growing adoption of digital posters in transit advertisements, such as metro, and buses for street-side advertising.

End-user Segment Analysis

Based on end-user, the global smart advertising market is divided into corporate, government, education, food & beverage, and others. The corporate segment dominates the market and is expected to expand at a rapid pace over the forecast period. An increasing number of creative and imaginative advertisement campaigns undertaken by multinational corporations and large-scale businesses with a substantial global or regional footprint leads to segment growth.

• According to data from April 2021, consumers increased their spending by 900 billion at online retailers in 2020 as compared to the previous two-year trend. On average, companies allocate 9.5% of their revenue towards marketing expenses.

Smart advertising is expected to play a key role in allowing businesses to expand their scope and undertake consumer engagement at major public venues, as well as improve customer experiences. Additionally, DOOH network operators are focused on integrating advanced electronic information and communication technology into traditional digital displays, such as AI, machine learning, sensors, and cameras.

These innovations enabled media agencies and marketers to develop innovative and engaging advertising strategies that increase consumer awareness and conversions.

Regional Analysis

In terms of region, the market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America dominates the smart advertising market, owing to the emergence of several key DOOH media firms, high advertisement spending by businesses, and the availability of high-speed wireless internet connectivity in the region. For instance,

• According to a report published by Insider Intelligence on November 7, 2022, digital ad spending in the US reached USD 248.72 billion., reflecting a 12.5% increase as compared to 2021. The growth rate slowed in 2022 and normalized from the significant growth registered during the pandemic. Digital ad spending is expected to reach USD 385.47 billion by 2026, accounting for 80.9% of total media ad spend.

The market in Asia Pacific is expected to grow rapidly during the forecast period. Increased emphasis by multinational corporations on innovative advertisements to develop a strong presence in high-potential and developing economies such as China and India drive the market in the region. Continuous investment in high-speed internet infrastructure, a growing number of smart city initiatives, and the involvement of major electronic component manufacturers in Asia Pacific are expected to drive the installation of digital displays and many other smart advertising items.

Get Free Sample Report

Segments

The global smart advertising market has been segmented on the basis of

Component

• Hardware
• Software
• Services

Product

• Interactive Kiosk
• Digital Billboard
• Digital Poster
• Others

End-user

• Corporate
• Government
• Education
• Food & Beverage
• Others

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Captivate
• Changing Environments Inc.
• CIVIQ Smartscapes
• Clear Channel Outdoor Holdings, Inc.
• Exterion Media (UK) Limited
• IKE Smart City
• Include Ltd.
• Intersection
• JCDecaux Group
• Lamar Advertising Company
• OUTFRONT Media Inc.
• Verizon

Competitive Landscape

Key players operating in the market are Captivate; Changing Environments Inc.; CIVIQ Smartscapes; Clear Channel Outdoor Holdings, Inc.; Exterion Media (UK) Limited; IKE Smart City; Include Ltd.; Intersection; JCDecaux Group; Lamar Advertising Company; OUTFRONT Media Inc.; and Verizon.
These players are working on designing new ways to help corporations around the world embrace DOOH and smart ads. Other businesses are focused on expanding their digital display networks to provide smart advertising services. For instance,

• On December 7, 2023, Verizon's myPlan customers are now able to enjoy the exclusive Netflix & Max (with ads) bundle for just USD 10 per month, offering over 40% savings. This new perk, along with other benefits such as the Disney Bundle, provides customers with unparalleled choice and value in their streaming services.
• In December 2022, Adobe reported a revenue of USD 4.53 billion, marking a 10% YoY growth or 14% in constant currency. The company's success was driven by its digital media and marketing solutions, as well as its commitment to innovation and customer satisfaction.
• In March 2020, The Trade Desk partnered with TikTok to enable advertisers to create and manage ad campaigns on TikTok's platform, leveraging The Trade Desk's smart advertising capabilities.