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Analyzing Trends in US Digital Ad Spending in 2023

GOOVER DAILY REPORT June 22, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Key Trends in US Digital Ad Spending in 2023
  3. Resurgence of Social Media and Its Impacts on Marketing
  4. Conclusion

1. Summary

  • The report titled 'Analyzing Trends in US Digital Ad Spending in 2023' explores the evolving dynamics of digital advertising in the United States. It highlights several key trends including the rise of digital video, changes in search and display advertising, the resurgence of social media, growth in retail media strategies, and the importance of personalization and influencer marketing. Advertisers are increasingly adapting to consumer behaviors through innovative formats and targeting strategies, with a focus on engagement and authenticity. Major findings indicate that digital video has seen a significant rise due to platforms like Connected TV and OTT, despite a slight decline in search and display advertising shares. Social media ad spending has surged again, underscoring its vital role in the ad ecosystem. Retail media strategies are on the rise, while personalization and influencer marketing remain crucial for impactful campaigns. Overall, brands are investing in omnichannel strategies to create integrated experiences across various touchpoints.

2. Key Trends in US Digital Ad Spending in 2023

  • 2-1. Rise of Digital Video

  • Digital video has experienced a significant rise in 2023, marked by a 10.6% increase in spending. Currently, digital video commands nearly one-quarter of total ad revenues, reaching $52.1 billion. The substantial growth is largely driven by Connected TV (CTV) and Over-the-Top (OTT) channels, which accounted for 42% of digital video revenues. This trend highlights the importance of visual storytelling and video ads in capturing audience attention.

  • 2-2. Evolution of Search and Display Advertising

  • In 2023, search advertising, which has traditionally been the cornerstone of digital advertising, saw its share decrease to 39.5% of total ad revenues, falling below the 40% mark for the first time. Similarly, display advertising's share also declined slightly to 29.4% of total revenues. Despite these shifts, search and display remain critical components of the advertising ecosystem, coexisting with emerging formats such as video and social media.

  • 2-3. Resurgence of Social Media

  • After a decline in 2022, social media ad spending surged by 8.7% in 2023. Total spending reached $64.9 billion, accounting for nearly 29% of all digital ad revenues. This resurgence solidifies social media's position as a major force in the advertising landscape.

  • 2-4. Retail Media Strategies

  • Retail media advertising revenues grew by a significant 16.3% year-over-year in 2023, totaling $43.7 billion. This growth underscores the increasing importance of e-commerce platforms and the mutually beneficial relationship between retailers and advertisers.

  • 2-5. Importance of Personalization

  • Personalization continues to drive digital advertising forward in 2023, with a focus on data-driven strategies to deliver highly relevant and targeted ads. This shift is evident across various digital channels, including social media and programmatic advertising, where marketers leverage data analytics and machine learning to tailor messages that resonate with consumers. Technologies that enable interactive and immersive ad experiences have further amplified the effectiveness of personalized campaigns.

  • 2-6. Rise of Influencer Marketing

  • Influencer marketing saw substantial growth in 2023 as brands increasingly value the authenticity and relatability provided by social media influencers. Platforms like Instagram, TikTok, and YouTube serve as key venues for influencer-driven content, allowing brands to reach niche audiences and foster stronger consumer connections. Influencers bring credibility and personal endorsement, which are crucial in building brand awareness and driving conversions.

  • 2-7. Omnichannel Strategies

  • The importance of omnichannel marketing strategies was emphasized in 2023, as brands aimed to create seamless and integrated experiences across multiple touchpoints. From social media to email marketing, mobile apps to websites, brands invested in cohesive campaigns to ensure consistent messaging and enhance brand visibility. This approach allows for better targeting and personalization, adapting to consumer behaviors and preferences to build stronger relationships and long-term loyalty.

3. Resurgence of Social Media and Its Impacts on Marketing

  • 3-1. Growth in Social Media Users

  • In 2024, the estimated number of social media users worldwide reached 5.17 billion. This extensive user base spans various platforms, with the average person using 6.7 different social networks per month. Despite the apparent slow growth in new users, this is due to the already massive number of active users, presenting significant opportunities for marketers and advertisers.

  • 3-2. Social Media Advertising Spend

  • Social media advertising expenditure continues to rise, with projections indicating it will reach $219.8 billion in 2024. Mobile advertising is a substantial contributor, expected to generate $255.8 billion by 2028. As organic reach declines across nearly all platforms, paid social media advertising has become an essential strategy for reaching target audiences.

  • 3-3. Impact of Video Content on Social Media Marketing

  • Video content remains a crucial element in social media marketing. According to the data, 44% of people prefer to learn about new products through short video content. Moreover, 87% of marketers reported increased sales attributed to video marketing. This rise in video content usage underscores its effectiveness in engaging consumers and driving sales.

  • 3-4. Strategies for Leveraging Social Media Statistics

  • Understanding key social media statistics is critical for enhancing marketing strategies. These statistics provide insights into audience demographics, preferences, and overall industry trends, enabling marketers to tailor their approaches to boost engagement and ROI. For example, emerging platforms like TikTok offer new opportunities to reach distinct audience segments.

4. Conclusion

  • The report underscores significant developments in US digital ad spending for 2023, particularly the expansion of digital video and its effectiveness in engaging consumers. Personalized approaches in search and display advertising, together with the resurgence of social media, especially through video content, highlight evolving consumer engagement tactics. The emphasis on personalization and influencer marketing is crucial for reaching niche audiences with authenticity. Retail media's growth, leveraging e-commerce platforms, showcases the importance of data-driven advertising at the point of purchase. While omnichannel strategies illustrate the need for seamless consumer experiences across platforms, the report also notes areas for further research, such as adapting to technological advancements and consumer behavior shifts. Looking forward, continuous innovation and strategic adjustments are imperative for advertisers to thrive in this dynamic landscape. Practical applications of these findings suggest that brands should invest in creating more personalized, authentic, and omnichannel experiences to maintain consumer engagement and drive long-term loyalty.

5. Glossary

  • 5-1. Digital Video [Trend]

  • Digital video has become a major component of digital ad spending, driven by consumer preference for video content and the effectiveness of video marketing in increasing sales and engagement.

  • 5-2. Search and Display Advertising [Ad Strategy]

  • Search and display advertising have evolved to incorporate more personalized and targeted approaches, adapting to consumer behavior changes and technological advancements.

  • 5-3. Social Media [Platform]

  • Social media's resurgence as a critical platform for digital advertising has been marked by increased user engagement and effectiveness of video content in marketing strategies.

  • 5-4. Retail Media [Ad Strategy]

  • Retail media has gained prominence as advertisers leverage retail platforms to reach consumers at the point of purchase, utilizing data-driven strategies.

  • 5-5. Personalization [Trend]

  • Personalization in advertising has become crucial for capturing consumer attention and fostering engagement, as customized experiences resonate more with audiences.

  • 5-6. Influencer Marketing [Ad Strategy]

  • Influencer marketing involves partnering with individuals who have significant social media followings to promote products authentically, leveraging their influence to drive consumer trust and engagement.

  • 5-7. Omnichannel Strategies [Ad Strategy]

  • Omnichannel strategies ensure a seamless consumer experience across multiple platforms and devices, integrating various marketing channels to reinforce brand messaging and engagement.

6. Source Documents