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The year 2020 was a challenging year for the entire digital advertising industry, with even the largest players like Google seeing significant revenue drops amid the COVID-19 crisis.
However, as millions of consumers shifted from brick-and-mortar stores to webshops, the market was able to bounce back.
According to data presented by Finaria.it, global search advertising revenues, as the largest segment of the digital ads industry, rose by 6.7% year-over-year to $152.6bn in 2020. The increasing trend is set to continue in 2021, with the entire market reaching $171.6bn value, $19bn more than a year ago.
Thousands of companies, especially the big ones, have been hit hard by supply chain disruptions and customer challenges caused by the pandemic. To cope, many of them stopped their digital ad campaigns and reduced search advertising bids in the first half of 2020. As a result, cost per acquisition and cost per click were down across verticals and markets.
The shutdown in the travel industry, which spent most of its advertising budget on search ads before the COVID-19, caused another major hit.
According to Statista Digital Market Outlook in 2019, brands and media buyers spent $142.9bn on search advertising worldwide, more than social media, video, and banner ads combined. In 2020, this figure jumped by almost $10bn, despite the sharp fall in ad spending in the first two quarters of the year.
Statistics show the global search advertising revenues are expected to jump by 12.4% in 2021. The increasing trend is set to continue in the next few years, with search ad revenues reaching $211.4bn by 2025.
Mobile search ad revenues are forecast to jump by 16% and hit $86bn this year. By 2025, this segment of the search advertising market is expected to hit a $120.2bn value.
Ad spending in the desktop search advertising segment is forecast to witness modest growth in the next few years, with the figure rising from $85.5bn in 2021 to $91.1bn in 2025.
The United States represents the world’s leading search advertising market and is expected to hit $67.74bn value in 2021, or almost 40% of total spending this year. The US search ad revenues jumped by nearly 20% amid the COVID-19 crisis. By 2025, the entire market is expected to hit $82.2bn value.
As the second-largest market globally, search ad spending in China is expected to grow by 11.3% YoY to $37.4bn in 2020. The United Kingdom follows with a 14% year-over-year growth and $12.3bn in ad spending.
Japan and Germany ranked as the fourth and fifth-largest markets globally, with $6.7bn and $5.1bn in search ad revenues, respectively.
Statistics show the combined ad spending in the five largest markets is expected to jump by 22% YoY and hit $157.2bn value by 2025.
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