Online Advertising Spending Trends – How Much Does PPC Cost?

Online advertising has grown by leaps and bounds over the past decade and has displaced lots of traditional marketing vehicles like newspapers and magazines. Business can now get a much bigger bang for their marketing dollar with digital advertising. But how much, exactly, does it cost? MarketingCharts just published a summary of data gathered by IAB/PwC that has some very interesting insights into how digital advertising has evolved. Some of the key take aways include:

“Digital audio was the fastest-growing digital advertising channel last year, with its growth rate being 64% higher than the overall total, at 57.9%. However, it remains a small piece of the digital advertising pie, at 2.6% share of total revenues. Digital audio advertising is largely a mobile affair, as mobile’s share of revenue grew to 85%.

Digital video was the next-fastest-growing channel, 44% higher than the average with a growth rate of 50.8%. Digital video ad spends saw strong growth across both mobile (47.8%) and desktop (58.2%), in so doing exceeding one-fifth (20.9%) share of US digital ad revenues for the first time.”

Source: SearchEngine Watch

It’s clear that rich formats like video and audio are growing fast.  But the search ads we are so familiar with continue to lead the way:

“Search continues to be the dominant digital advertising format, though it is ceding share to faster-rising formats such as video. Last year search accounted for 41.4% share of total digital ad revenues (down from 42.2%), with display comprising 30% share (down from 31.5%), digital video 20.9% share (up from 18.7%) and other formats combining for the remaining 7.8% share (up from 7.6%).

Search accounted for a larger portion of revenues on desktop than on mobile, whereas display had a greater presence on mobile than desktop.”

Source: SearchEngine Watch

The amount of advertising dollars spent by the top 10 companies is an astounding 80% of the entire digital ad market.  That is unbelievable consolidation by just a handful of companies.  MarketingCharts summarizes like this:

“The top 10 companies accounted for 78.6% of all digital ad revenues last year, up from 78.1% in 2020 and 76.6% a year earlier. With the next 15 companies occupying another 6.5% share of revenues, just 14.9% were left for all the remaining publishers to fight over. With digital ad revenues totaling $189.3 billion last year, this implies that for all but the largest 25 companies, the actual amount of ad spend in play was a little over $28 billion.”

Source: SearchEngine Watch

As a prospective digital advertiser, you should consider the fastest growing formats of online ads along with the tried-and-true search ad format to build your campaign and reach the biggest audience.  Consult with an online advertising specialist to find out exactly what formats work the best in your industry and come up with a budget that makes sense for your average customer value. 

Michael Delpierre
Latest posts by Michael Delpierre (see all)