- US digital ad revenue is poised to reach nearly $100 billion by 2021, according to BI Intelligence estimates. This represents compound annual growth of 8% from the $68.9 billion expected in 2016. Digital will account for 45% of total ad revenue in five years, up from a 37% share at year-end 2016, as spending in traditional, nondigital media formats stalls.
- Increased time spent by consumers on digital media, coupled with brands' growing comfort with allocating budgets to digital formats, will power the strong growth of the US digital ad market. Two-thirds of respondents surveyed by the Interactive Advertising Bureau said they plan on increasing spending on digital video in the next year, while just one in 10 intend on increasing spending on traditional TV during that period.
- Mobile will become the top destination for digital ad spending as advertisers continue to attempt to close the "mobile opportunity gap." While time spent on phones and tablets has been growing rapidly, these platforms see a relatively small share of ad budgets.
- Digital video advertising will grow faster than any other format over the next five years, primarily due to strong mobile demand. Revenue in this category is forecast to rise at a CAGR of 22%, from $8.5 billion in 2016 to $23 billion in 2021.
- Search ad revenue's growth will be more modest, but it will continue to make up the largest share of digital advertising revenue. BI Intelligence estimates that revenue in this category will rise at five-year CAGR of 6% to reach $43.7 billion in 2021. This compares with $32.9 billion in 2016.
- Display ad revenue will post the slowest growth over the next five years. It's projected to reach $26.4 billion in 2021, up from $22.1 billion in 2016. This represents a five-year CAGR of 4%.
- Social advertising in all formats is gaining traction and will be among the key drivers of digital ad growth in the next five years. Social ad revenue is poised to climb to $30.8 billion by 2021, up from $15.5 billion this year — a five-year CAGR of 15%.
- Artificial intelligence, augmented and virtual reality, and sponsored content will help propel further digital ad growth in the next decade. These technologies are the keys to the next $100 billion in revenue for the space.
Consumers are spending more and more time consuming digital media, and advertisers [...]