Digital Marketing Market Overview
The global digital marketing market was valued at around $290–310 billion in 2019 with future estimates looking much stronger owing to continual attraction on digital channels. The digital marketing industry report forecasted the industry to grow at a CAGR of 12.8%, reaching around $330–340 billion in 2020.
Rising investments in online video and mobile advertising have fueled the overall digital marketing expenditure in North America and Western Europe. The mobile ad expenditure contributes to approximately 39-42% of the digital spend in Western European markets such as the UK, Germany, and Spain and was expected to reach 55-60% by 2019.
Customers in Europe consider mobile in-app display to be intrusive, and as such, spending on mobile in-app display is expected to decrease in the region in order to avoid devaluing the brand image.
This digital marketing industry report covers the regional market overview, growth rate, digital marketing market size, end-use industries, and identifies regions with a well-developed market for digital marketing. The report also identifies the opportunities and challenges that impact the digital marketing services and provides Porter's Five Force Analysis for these regions. The report includes supply trends and insights, and provides a comprehensive study of the key regional digital marketing service agencies such as iProspect, Havas Digital, SapientNitro (Acquired by Publicis Groupe), VML Group and RAPP. Further, it shares the procurement best practices with sourcing strategy, pricing analysis and service capabilities in the digital marketing industry.
Digital marketing agencies provide a broader set of services, such as strategic planning, campaign management, email creatives, on-site web experience, A/B testing, analysis of results, and optimization recommendations across all channels, including mobile, social media, and websites. Some of the agencies provide proprietary technology, however, most rely on automation providers that have in-depth expertise in that specific area.
According to digital marketing market analysis, full-service outsourcing is the most prevalent digital marketing procurement model, where consolidation of requirements is possible with global agencies. The regional bundling approach is another digital marketing procurement model that is widely preferred by automotive buyers to achieve a balance between cost and quality.
Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.
Digital Marketing Services Market Trends
Category Intelligence on Digital Marketing Services covers the following:
- Information relating to market, supply, cost, and pricing analysis
- Hard-to-find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Digital Marketing Services Global Market Outlook
Global digital marketing generated $300-310 billion in revenues in 2019. Experts predicted that digital ad revenue will be down by 19-25% in 2020 as 60-65% of advertisers, at one point, paused the campaigns and events due to the COVID-19 pandemic.
However, social media and streaming services are expected to pick up the pace globally by 2021.
Continuous digitization has transformed the way businesses work and implement their strategies. Digital marketing services have offered businesses an efficient solution to interact with multiple shareholders in the marketplace via several channels, including instant messaging, email, and social networking. In addition, they allow businesses to integrate different digital channels and assess ad campaigns in real-time.
The constant launch of fast data networks and the increasing prevalence of social media platforms are motivating businesses to spend rigorously on digital marketing thus driving the digital marketing industry size.
Moreover, the increasing internet penetration is influencing marketers to embrace digital marketing solutions to broaden their geographical radar and consequently bolster their consumer base. Some of the innovative digital marketing solutions include:
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Interactive chatbots, which are computer programs driven by artificial intelligence (AI) and machine learning (ML) for mimicking human conversation
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Tools driven by blockchain and AI, which help marketers track their target audience and boost customer engagement
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Influencer marketing, which helps marketers choose an influencer to share product or service experiences via social media platforms
Global Digital Marketing Maturity
Mobile ad expenditure that earlier accounted for 6–9% of the total digital spend in 2013 was expected to contribute around 37–39% of the digital spend in key Western European countries such as the U.K., Italy, and Spain by 2017. Subsequently, the digital marketing industry report forecasts it to play an even bigger role in the market.
Global Digital Marketing Industry Trends
- Retailers are increasingly adopting location-based ad services to interact with consumers by offering them tailored updates on discounts, offers, and products, which is considerably driving the digital marketing industry growth.
- The rising penetration of electronic gadgets and the development of high-speed networks such as 4G and 5G technology has led to an uptick in demand for mobile advertising thus opening new growth opportunities for marketers to enhance customer relationships.
- Given the amplifying competition, marketing tactics are moving from selling to consumer satisfaction and retention. The data gathered via digital marketing campaigns is used to assess customer behavior patterns, which is further tailored to optimize ad campaigns.
Global Drivers and Constraints
The digital marketing market size in Europe and North America collectively was expected to balloon at a CAGR of 11% and contribute around 65% of the global revenue in 2018. This robust growth is owing to the positive expenditure inclination from key industries including, BFSI, CPG, entertainment, and media and telecom.
Drivers
RTB and Digital OOH Media
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Rising adoption of Real-Time Bidding (RTB) of online display ad slots and increasing consumption of rich media and video advertisements are expected to propel display advertising market size spend in the coming years in Western Europe
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Adoption of digital Out-Of-Home (OOH) media is limited to the developed countries. For instance, the emergence of digital TVs in gas stations, where 78% of the drivers (in the US) watch TV as their vehicles are refueled. As per the digital marketing industry report, targeted mobile ad delivery and emerging advertising technologies (such as RTB platforms, location-aware, and bandwidth-aware technology tools) are enabling contextually relevant and personalized ads based on device features, mobile internet speed, and location.
Surging Smartphone Penetration
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The rising penetration rate of smartphones and the continued launch of high-speed mobile networks are influencing advertisers to turn to mobile advertising.
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Retailers, in particular, are prioritizing the employment of location-driven ad services and delivering consumers custom updates on offers, products, and discounts thus pushing the demand for digital marketing services considerably.
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Location-driven ads foresee visitors automatically by sending messages on their smartphones informing them about different offers and discounts upon entering shopping centers or malls.
As such, the increasing smartphone usage has created new avenues for marketers to engage and bolster their relationships with consumers thus auguring well for digital marketing market size
COVID-19 Impact on Digital Marketing Services
The COVID-19 pandemic has compelled people to remain indoors, which has further increased the internet usage. Following the physical distancing measures, consumers are socializing through online platforms. Social media marketing activities witnessed a significant rise in March 2020, compared to the previous quarter.
With COVID-19-induced restrictions, several brick-and-mortar stores are going online as consumers are increasingly shopping on established e-commerce platforms. As such, marketers are focusing on maintaining the omnichannel presence by monitoring the most preferred platforms among customers and sending customized messages on only those platforms.
Moving ahead, the COVID-19 crisis has propelled a tectonic shift in the way people utilize various mobile apps. As a result, app developers have been especially examining their advertising set-ups and stepping up their abilities to drive for more visibility and accountability with collaborators amidst the public-health crisis and the subsequent economic standstill.
Case in point, HubSpot Inc. (the US) has announced the roll-out of new features and updates to its platforms for helping companies in addressing the hurdles arising due to the COVID-19 pandemic. The additional features consist of expanded customization functionality, enterprise sales CRM, and scalable contacts pricing structures.
Increasing Cloud Subscriptions
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Cloud-driven deployment of digital marketing solutions improves flexibility and enables businesses to tailor their services and products on a broad length.
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Also, cloud-driven deployment helps improve the pricing models and establish a control center to collaborate, oversee, and organize different aspects of a digital marketing campaign.
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Furthermore, businesses can utilize cloud deployment to integrate dedicated hosting into virtual cloud servers.
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This helps businesses reduce the costs related to the installation of the digital marketing solution and the entire IT infrastructure considerably.
Constraints
Difficulty in Calculating ROI
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Most marketers believe that they are not sure about the impact of digital marketing as they often encounter a lack of synergy between marketing and procurement centers. Thus, securing a budget for digital marketing investments becomes difficult because providing a digital marketing return on investment is the most critical challenge.
Existing Privacy Concerns
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While digital marketing solutions provide myriads of benefits, security concerns associated with data access by hackers and crackers is negatively impacting the market growth.
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These issues consist of the use of an increase in malware injections, unsafe application programming interfaces (APIs), and social engineering attacks that are most common in driven digital marketing solutions.
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As businesses house chunks of data that entail business and customer information, either of the above security concerns triggers a serious loss.
Key Observations Across Digital Channels
Digital component with medium strategic importance
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Marketers are adopting software-enabled, automated and measurable e-mail techniques
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In the US, e-mail marketing shares almost 10% of the total online ad spend by the marketer
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Agency and marketer adoption rate is significantly high in the US
Why You Should Buy This Report
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The digital marketing industry report provides insights into the global and regional market trends, market size, value chain analysis, and market outlook for North America, Western Europe, APAC, and MEA.
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The research study lists out the industry drivers and constraints and a detailed Porter’s five force analysis for emerging and developed markets.
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It lists out the agency billing rates across the globe and does a SWOT analysis on key players, such as Havas Digital, iProspect, Publicis Sapient, among others.
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Furthermore, the intelligence report offers the best digital marketing procurement practices, sourcing and pricing models, and end-user digital marketing market update.
