Advertising in the US - Statistics and Facts

Publift
March 7, 2023
November 21, 2023
Advertising in the US - Statistics and Facts

The US is home to one of the most lucrative advertising industries in the world. With a projected ad spend of almost $300 billion in 2023, the US market leads competitors such as China and Japan by a wide margin.

While digital advertising accounted for 67% of total global ad revenue in 2022, that number is expected to grow to 70% by 2025. In the US, meanwhile, digital’s share stood at 61% in 2022.

Digital advertising’s explosive rise means it's hardly surprising that brands are investing more in the space to reach their target audience. This growing dominance within the advertising ecosystem has been mirrored by a continuous decline in traditional forms of advertising such as print and radio.

The rise of influencer marketing is another factor contributing to the changing landscape of advertising in the US. Social media influencers such as Kylie Jenner and Selena Gomez have garnered hundreds of millions of followers, driving companies to promote their products and services through these individuals. Influencer marketing ad spend in the US accounted for $2.23 billion in 2022 on Instagram alone. 

Whether you’re a US-based marketer or advertiser or not, understanding what’s happening within the world’s biggest ad market can be key to planning ad campaigns that deliver results.

Table of contents:

US Advertising Market Trends

Popular Ad Media in the US

Traditional Advertising in the US

Digital Advertising Market in the US

Digital Advertising Market Drivers in the US

Digital Ad Market Trends in the US

Digital Ad Market Challenges in the US

Digital Ad Market Scope in the US

Final Thoughts

Frequently Asked Questions

US Advertising Market Trends

Technological advancements have driven a shift in consumer behavior, forcing the US ads market to evolve rapidly and adopt new practices. Here are some of the most prominent market trends in the US. 

1. Digital Advertising 

Around a decade ago, digital advertising in the US was a small part of the advertising industry. Now, it’s the mainstay.

In fact, the rise of digital advertising is one of the most significant trends in the US ads market. As more people spend time online, businesses are investing heavily in digital ads to reach them. Online ads already account for almost two-thirds of the market share in the American ad industry. At a global level, the digital ad space is expected to witness a 13.9% compound annual growth rate (CAGR) by 2026

Customers now have more options than ever. Digital publishers, social platforms, search engines, and ad platforms are the major drivers of this segment. Moreover, the evolution in ad technology has made ads more effective and efficient than ever.

2. Data and Analytics

Modern advertisers and publishers are leveraging vast amounts of information to gain valuable insights into consumer behavior and preferences.

Advertisers have been able to create more targeted ad campaigns using programmatic advertising platforms, which use algorithms to automate the buying and selling of ad inventory.

3. Influencer Marketing 

The rise of social media has allowed advertisers to target customers in many different ways through influencer marketing.

Influencers are now a powerful force in the advertising world as companies increasingly partner with them to promote their products. Influencer marketing spend is now projected to top $32.5 billion in 2023

4. Video Content

Another notable trend in the US ad market is the increasing demand for video content. Video has always been a popular format for advertising, allowing brands to convey their messages to consumers in a more engaging and creative way.

Thanks to the growing popularity of video platforms, marketers and advertising agencies have easier access to the production and distribution of videos than ever. Furthermore, the rise of streaming services—such as Netflix and Amazon’s Prime Video—has created new opportunities for marketers to advertise to consumers who are increasingly shifting away from traditional TV sources.

5. Sustainability and CSR

As modern consumers increasingly look for brands that align with their values, businesses are becoming more socially responsible in order to gain consumer loyalty. This trend has led to the rise of socially responsible marketing campaigns, where businesses promote a cause or social issue alongside their products and services.

Popular Ad Media in the US

The US is a huge market when it comes to advertising. It’s also one of the most technologically sophisticated markets. Advertisers in the US use different ad media according to their target audience and message.

For example, social media platforms are increasingly seen as a more effective channel to generate leads. However, radio advertising still remains a popular choice among advertisers for local targeting. Here’s a list of popular ad media in the US.   

1. Digital Advertising

Digital advertising includes running ads on social media platforms, search engines, websites, and mobile apps. Digital advertising allows companies to reach their target customers more efficiently.

In most cases, advertisers only pay for the clicks or impressions their ads receive. Furthermore, digital advertising also offers impressive targeting, as companies can target specific customers based on demographics, interests, and behaviors.

2. Television Advertising

Although traditional advertising is slowly declining, television still remains one of the most preferred ad platforms in the US. Cable channels allow companies to reach a broad audience with video ads. US advertisers can reach national or local audiences, depending on the campaign and budget.

TV advertising is also a great way to target the right customers. For instance, if a company’s target consumer is young adults, it can advertise its products and services on a channel that airs programs targeting that demographic.

3. Print Advertising

The popularity of print advertising is also in decline, but still remains a feasible option for companies looking to target people based on their interests. Ads in magazines and newspapers can still effectively target audiences, based on geographic location, age, gender, and interests. Revenue from newspaper and magazine ads in the US is projected to hit $11.5 billion in 2022.

4. Radio Advertising

Radio advertising is still a popular way for companies to reach local consumers in the US, especially during commuting hours. Radio ads can help companies target specific demographics through the stations they choose to advertise on.

For example, if a company is looking to target an older demographic, it can advertise its products and services on a station that plays classic hits.

5. Outdoor Advertising

Technology has helped companies more effectively tailor ads for outdoor displays such as billboards, signs, and other types of public display surfaces. 

Indeed, while outdoor advertising has been in decline since 2017, the US market is expected to grow by 1.3% in 2023 to $8.39 billion. 

Companies can use outdoor ads both to reach a broad audience and to target audiences based on geographic locations.

6. Direct mail advertising

Direct mail remains an effective method of sending commercial messages. US companies still use direct mail to promote their brands and advertise directly to specific consumers. In fact, 74% of US marketers agree that direct mail is more effective than other channels.

7. Sponsorships and Events

The trend of sponsoring events, such as sports games or music festivals, or hosting own events to promote products or services has long been popular among US businesses.

The US is the biggest sports and entertainment market in the world. As the market grows, companies continue to invest more in sponsorships and events. The scope of sponsorship varies according to a brand’s size and its prospects.  

Traditional Advertising in the US

Traditional advertising refers to running ads on non-digital channels such as print, radio, and television to reach consumers. While these channels have been hugely popular for decades, they have been ceding market share to the digital platform. However, traditional media still accounts for a significant portion of ad spend as many brands still find it useful. 

Recent studies and stats on traditional advertising in the US suggest that while the industry is facing challenges from digital media, it remains a significant and important part of the advertising landscape.

Brands still find traditional channels such as TV, newspapers, billboards, and direct mail effective at driving brand awareness. Moreover, traditional ad media still possesses a high level of trust and credibility among consumers.

Traditional advertising has seen some growth recently, but it’s expected to account for less than 20% of total ad spend by 2026

Here is an overview of different traditional advertising platforms in the US.

  • Television commercials have been one of the most popular forms of advertising for many years. However, as digital advertising provides more efficient advertising options for most ad campaigns, TV advertising’s market share is declining. With people shifting to streaming services, the viewership of traditional TV is declining. US TV ad spend is expected to decline to $64.94 billion, accounting for just 14.3% of total ad spend.  
  • Despite seeing a continuous decline, print advertising is still expected to attract $11.34 billion in 2023. However, as most marketers have shifted away from traditional magazine and newspaper advertising, magazine and newspaper publishers have also turned to the internet to cater to growing digital consumers. 
  • Radio ads attracted just $11.1 billion in revenue in 2022, down from $17.69 billion in 2008. However, marketers believe that radio advertising is in pretty good shape as more than 214 million Americans listen to the radio. Radio ads are especially effective at targeting regular commuters who tune into radio stations while driving. Another exciting development in radio advertising is the growing demand for digital audio.
  • Outdoor and billboard advertisements are still popular among US advertisers. It’s growing at a slower rate and US businesses are expected to invest $8.3 billion in 2023, up from $7.09 billion in 2021 according to different marketing claims. 
  • At $38.5 billion, direct mail advertising accounts for the largest local ad spend in the US.  

Digital Advertising Market in the US

The digital ads market in the US has exploded recently, with companies allocating a significant portion of their ad budgets to digital channels. And as there’s a significant increase in the use of technology and the internet, digital marketing is now essential for businesses of all sizes.

Digital ad spend will continue to grow over the years, with it projected to reach $172.3 billion in the US by 2023

One of the primary drivers of this growth is the shift in consumer behavior, with consumers spending more time online. The average time spent by US adults on digital platforms is more than 6 hours per day in 2022.

The increasing use of mobile devices is another factor contributing to the sector’s growth, with mobile advertising already accounting for over half of total digital ad spend. Mobile advertising ad spend in the US in 2022 reached almost $170 billion. By 2026, it is expected to attract an ad spend of almost $250 billion. 

Social media platforms have also played an important role in attracting businesses to digital advertising. US companies invested $56.85 billion in social media ads in 2022. Facebook continues to be the world’s most used social media platform

Digital Advertising Market Drivers in the US

There are several key market drivers of the digital ads market in the US. Here’s a list of the most significant drivers:

1. Social Media

Social media is an integral part of people's day-to-day lives, with 69% of US adults using at least one social platform regularly. Facebook remains the most popular social platform in the US, followed by YouTube and Instagram. TikTok is increasingly popular with younger generations, attracting more than 80 million monthly active users in the US.

Social platforms offer highly targeted advertising options, allowing advertisers to reach specific consumers based on demographic, location, interests, and behavior. Companies are increasingly interested in running ads on social platforms to reach their target audience, with almost 92% of US businesses using social media for advertising and marketing purposes.

Facebook and Instagram are the two most popular social platforms used by businesses in the US, with 91.3% and 70.7% of businesses using the platforms, respectively. This is followed by Twitter at 45.9% and LinkedIn at 35.5%.

2. eCommerce

Prior to the global pandemic, eCommerce was growing at a steady rate. COVID-19 accelerated US consumers’ shift to eCommerce, with eCommerce sales reaching $1.03 trillion in 2022 (PDF download), up 8.25% from the previous year. 

The rise of eCommerce is not only one of the significant drivers of internet advertising in the US, but it has also led to the rise of social commerce, which uses social platforms to make online purchases. US consumers are projected to increase their purchases of products and services through social commerce from $27 billion in 2020 to 56.2 billion in 2023.

3. Artificial Intelligence

Businesses are using AI-powered tools to personalize content, optimize ad campaigns, and improve customer experiences. This means there’s an increasingly important role of artificial intelligence (AI) in digital marketing. US spending on AI solutions is expected to climb to more than $120 billion by 2025.

Chatbots are also becoming more prevalent in digital marketing as companies widely adopt them in some form for customer support. Businesses could use chatbots to save $11 billion per year.

4. Increasing Use of Mobile Devices 

As more people rely on their mobile devices for online activities, marketers are focusing their efforts on mobile-based ad strategies to reach and engage with their target audience.

The growth in mobile advertising, especially in-app advertising, is primarily attributed to the increasing number of mobile users along with the rise of mobile-based social platforms, such as Instagram and TikTok, which have become popular channels for digital marketing.

Mobile usage has also influenced the way marketers approach their digital marketing strategies. Mobile devices have smaller screens compared to desktops, meaning marketers need to optimize content for mobile viewing. This has resulted in the rise of mobile-first design, where websites and ads are created with the mobile user experience in mind.

The prevalence of mobile devices has also made it easier for marketers to track user behavior and target their ads based on statistics. This allows for more personalized and targeted advertisements, which can result in higher conversion rates and better ROI for marketers.

The impact of mobile usage on digital marketing can also be seen in the rise of mobile-based technologies, such as augmented reality (AR) and virtual reality (VR). These technologies allow marketers and advertising agencies to create immersive experiences for users, such as trying on clothes virtually or experiencing a product in a virtual environment.

5. Programmatic Advertising

Programmatic advertising refers to an automated system of buying and selling ad inventory through ad tech platforms. It uses statistics and algorithms to buy and sell ad units in real-time, allowing brands to target their audience more precisely, effectively and with greater efficiency. Programmatic advertising has also been shown to improve ad performance and drive higher engagement rates.

6. Data-driven Advertising 

Another market driver is the increasing use of data-driven advertising. Data-driven advertising involves the use of statistics and analytics to plan informed advertising strategies and improve targeting.

With the growing availability of statistics on consumer behavior and preferences, advertisers are able to create more personalized and relevant ads that resonate with their target audience.

Digital Ad Market Trends in the US

The digital advertising landscape in the US is constantly evolving, with new trends emerging each year. Here are some key trends that are shaping the digital ad spend market in the US:

Digital Ad Market Challenges in the US

Between shifting consumer behaviors and technological advancements, ads are becoming more accurate and efficient. As a result, businesses of all sizes are benefiting from their advertising efforts like never before.

With that said, there remain several challenges for the digital ads market. Here are some of teh biggest. 

1. Privacy and Data Security

The increasing concern over privacy and data security is one of the biggest challenges for the digital and internet ad market in the US.

As consumers become more aware of how their personal information is being collected, they have demanded greater control over how it is used. This concern has led to the introduction of new regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

To address these challenges, advertisers should focus on creating less intrusive ads that respect users' privacy. More marketers are planning to increase their investment in personalized marketing in 2023. This trend is expected to continue as advertisers seek to improve efficiency and target their ads more effectively.

2. Ad-Blocking

The digital ad market in the US is faced with the growing use of ad-blocking software by internet users. As of 2022, 34% of American internet users use ad-blocking software, which allows users to block ads from appearing on websites and massively reduces the effectiveness of digital ad campaigns.

The increasing use of ad-blocking software has led advertisers to incorporate contextual advertising in their ad campaigns. Furthermore, advertisers are also adopting AI and machine learning to better target their ads and measure their effectiveness. 

3. Increasing Competition

The digital ad market in the US is highly competitive as more companies enter the market and offer new advertising solutions. While Google and Facebook continue to dominate the digital ad market in the, new platforms—such as Amazon, TikTok, and Twitter—are also gaining ground.

There is growing collaboration between advertisers, publishers, and technology providers to develop new standards and best practices for digital advertising. The Interactive Advertising Bureau (IAB) has developed several initiatives, such as the IAB Tech Lab and the IAB Data Center of Excellence, to help address some of the digital advertising industry’s challenges.

4. Brand Safety

The rise of misinformation on the internet and social media platforms poses a great challenge for US advertisers. Brands are increasingly concerned about the association of their ads with controversial or inappropriate content, which can damage their reputation and brand image. According to a survey conducted by Kantar, 69% of advertisers in the US are concerned about brand safety while running digital campaigns.

Digital Ad Market Scope in the US

The digital ad market in the US has seen remarkable growth as more businesses shift their advertising budgets to digital channels. The growth of digital advertising can be attributed to several factors, such as the rise of mobile devices, social media, and the increasing use of programmatic advertising.

Traditional advertising channels, such as television and print, are no longer as effective as they once were, as consumers increasingly turn to digital channels for news, entertainment, and communication. Businesses are recognizing this shift and allocating more of their ad budgets to digital channels, which allow them to reach their target audiences more effectively, with greater precision, and at a lower cost.

The rise of mobile devices also plays a significant role in the growth of digital advertising. With more and more consumers using their smartphones to access the internet, mobile advertising has become an essential component of digital advertising. Mobile advertising allows businesses to reach consumers at any time wherever they are and deliver highly targeted ads based on a range of information, including location, search history, and user behavior.

Social media advertising is another essential component of digital advertising, with platforms such as Facebook, Instagram, and Twitter offering businesses the ability to accurately target specific audiences with their advertisements. Advertising on social platforms has proven effective for businesses looking to reach younger audiences, who are increasingly turning away from traditional channels. Social media advertising also offers businesses the ability to leverage user-generated content and deliver highly targeted ads based on available information.

As technology continues to evolve, it is likely that digital advertising in the US will become even more important for businesses looking to promote their products or services. Advances in AI, machine learning, and data analytics are expected to drive further innovation in the digital advertising industry, enabling businesses to deliver even more targeted and personalized ads to their audiences. Businesses that are able to effectively leverage digital channels are likely to see significant success in the coming years.

Final Thoughts

The US advertising industry is massive. With technological advancements, there has been a significant shift in the way businesses reach their target audiences. The US market’s projected growth means it is undoubtedly a great place for future advertisements.

That being said, traditional marketing is still an important part of the US ad industry and there are some niches—such as local markets and older demographics—that can be targeted better with traditional advertising. If you’re looking to make the most out of your advertising campaigns, you can mix the best of both worlds for great results. 

However, incorporating digital advertising and staying up to date on new technology is extremely important for new advertisers and even publishers. You may want to take advantage of mobile-based advertising, invest in digital tools, and boost your social media activities for future-proof advertising campaigns.

Publift helps publishers and developers get the most out of the ads on their mobile apps or websites. It has been helping publishers increase revenue by up to 55% since 2015 by helping them to sell digital ad inventories to premium advertisers. 

If you’re making more than $2,000 in monthly ad revenue, contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.

Frequently Asked Questions 

What Is the Size of the Digital Ad Market in the US?

US digital and internet ads spend is expected to reach almost $300 billion in 2023 and forecast to grow to more than $440 billion by 2027. At 17%, the retail industry is the major contributor to digital advertising, followed by healthcare and pharma at 10.6%, and entertainment and media at 10.1%.  

Who Are the Major Digital Advertising Market Vendors in the US?

Google and Facebook are the dominant digital advertising market vendors in the US, accounting for a combined 48.4% of total digital ad spending. However, it’s expected that this dominance will slowly balance out in the coming years as new platforms like TikTok attract more people, especially the younger generation. 

What Is the Future of Advertising in the US? 

With total US ad spend projected to grow to more than $400 billion in 2023, the American advertising industry’s short-term outlook is bright. In the longer term, there may be some economic challenges, but there is little reason to expect a prolonged downturn.

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