Interactive Advertising Market Forecast 2023 - 2030

By Type :

Based on the type, the market is bifurcated into social media ads, playable in-app ads, display ads, interactive video ads, and others. The social media ads segment accounted for the largest revenue share of 30.5% in the year 2022. Social media ads refer to a type of interactive advertising that utilizes social networks including Instagram, Facebook, and Twitter for delivery of paid ads to target audience. Moreover, social media ads offer several benefits including increased brand awareness, improved brand royalty, higher conversion rates, in-depth analytics, and increased lead generation among others. The above benefits of social media ads are increasing its application in media & entertainment, BFSI, retail & e-commerce sectors among others.

According to Meta, Facebook monthly active users reached 2.96 billion as of December 2022, witnessing a growth of 2% year-over-year. Hence, rising penetration of social media is among the key factors driving the adoption of interactive advertising in social media platforms, in turn contributing to the growth of the market.

The display ads segment is anticipated to register fastest CAGR growth during the forecast period. Display ads include a wide range of visual applications that are utilized by brands or businesses for attracting audiences to websites, social media pages, or other digital channels while encouraging audiences to take specific actions. Display ads primarily consist of a combination of graphics, text, and video or image components to appeal to audiences and encourage them to click through several digital platforms and perform particular actions that lead to an outcome. Interactive display ads are an ideal approach to obtain greater engagement and increase ROI (Return on Investment). Display ads enable users to display products in the form of a video, poll, game, or quiz. Moreover, display ads offer various benefits including improved initial brand awareness & visibility, enhanced visuals, along with the ability to target and retarget preferred audiences among others.

For instance, Google enables users to create display ads and campaigns to reach relevant audiences in multiple places or to boost leads, sales, and website traffic along with building awareness and consideration for a product, business, or service. Therefore, the rising advancements associated with display ads are anticipated to drive market growth during the forecast period.

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By End-User :

Based on the end-user, the market is segregated into media & entertainment, BFSI, retail & e-commerce, automotive, education, and others. The retail & e-commerce segment accounted for the largest revenue share in the year 2022. Factors including the growing consumer preference for online shopping, increasing investments in retail & e-commerce, and rising deployment of interactive marketing strategy by retail enterprises are driving the growth of the retail & e-commerce sector.

According to the U.S. Census Bureau of the Department of Commerce, the retail e-commerce sector in the United States was valued at USD 265.9 billion during the third quarter of 2022, witnessing a growth of 3% from the second quarter of 2022. Therefore, the growth of retail & e-commerce sector is driving the adoption of interactive advertising for expanding brand awareness and boosting conversion and sales, in turn proliferating the growth of the market.

BFSI segment is expected to witness fastest CAGR growth during the forecast period. The growth of BFSI segment is attributed to several factors including rising investments in development of banking & financial institutions, increasing trend of digitalization in BFSI, and rising adoption of digital services among financial institutions to enhance customer experience.

For instance, according to India Investment Grid, BFSI sector in India consists of 22 private sector banks, 53 regional banks, 18 public sector banks, 1,542 urban cooperative banks, 46 foreign banks, along with 94,384 rural cooperative banks as of 2019. Interactive advertising is primarily used by banking & financial organizations for targeting potential market segments and customers more definitively, increasing brand awareness, and attracting potential customers to click and end up on a landing page on the bank's website. Thus, the rising prevalence of banking & financial institutions is projected to drive the adoption of interactive advertising for aforementioned applications, in turn driving the growth of the market during the forecast period.

By Region :

The regional segment includes North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

North America accounted for the largest revenue share of USD 13.87 Billion in 2022 and is expected to reach USD 42.32 Billion by 2030, registering a CAGR of 15.4% during the forecast period. In addition, in the region, the U.S. accounted for the maximum revenue share of 55.50% in the same year. The adoption of interactive advertising in the North American region is primarily driven by its usage in retail & e-commerce, automotive, media & entertainment, and other sectors. Moreover, the increasing application of interactive advertising by automobile companies to raise brand awareness, reach location-specific and model-specific target customers and engage in-market shoppers is among the significant factors driving the market growth in the region. For instance, according to the International Energy Agency, electric car sales in the United States reached 630 thousand units in 2021, depicting a substantial growth of over 100% in comparison to 295 thousand units in 2020. Hence, the growing automotive industry is propelling the deployment of interactive advertising by automobile companies to increase brand awareness and reach target customers, in turn fostering market growth in the North American region. Additionally, rising investments in the retail & e-commerce sector are anticipated to provide lucrative growth aspects for the market in North America during the forecast period.

Asia-Pacific is expected to register fastest CAGR growth of 15.6% during the forecast period. The rising pace of industrialization and development is creating lucrative opportunities for market growth in the region. Moreover, factors including the growth of multiple industries such as retail & e-commerce, BFSI, media & entertainment, and others are fostering the market growth for interactive advertising in the Asia-Pacific region.

For instance, according to Invest India, the media & entertainment industry in India projected to grow by 10.5% annually and reach USD 35.4 billion by 2025. Therefore, the growing media & entertainment sector is projected to drive the utilization of interactive advertising by entertainment companies to reach a larger range of target audiences with its marketing content, thereby, boosting the market growth in the Asia-Pacific region during the forecast period.