Data-driven adspend to hit $520bn as Amazon strikes

digital_disciplines2Widescale adoption of data-driven targeting techniques will fuel huge growth in global digital advertising spend – which will nearly double in value from $294bn (£231bn) this year to reach $520bn (£409bn) by 2023 – with Amazon set to prise open Facebook and Google’s vice-like grip on the market.
That is the standout finding from a new Juniper Research report, entitled “Future Digital Advertising: Artificial Intelligence & Advertising Fraud 2019-2023”, which predicts the sector will witness an average annual growth of 15% over the next five years.
This will be driven by the use of AI-based programmatic advertising to deliver highly targeted ads across digital platforms, including online, mobile browsing, in-app, SMS, digital out of home and online subscription TV services.
The study found that Amazon will be the main winner in this new data-driven era. The tech giant’s emerging digital ad business, driven by its unparalleled consumer retail data, will help the company boost its share of global digital adspend from 3% to 8% by 2023.
Amazon’s advertising revenues will reach $40bn (£31.5bn) by 2023; a growth of 470% from its ad revenues in 2018. The company will leverage its retail data and heavy investment in machine learning to offer efficient targeting through its advertising platforms, and attract users from the established duopoly of Google and Facebook.
According to the study, Google’s ad revenues will top $230bn (£181bn) by 2023. Despite this, Juniper forecasts that the company’s global market share of digital advertising spend will fall 1% over the next four years due to the growth of competing platforms, including Amazon and Baidu.
The report anticipates advertising platforms will focus on increasing access to contextual ad traffic data to maximise the efficiency of machine learning for targeting abilities. As a result of these efforts, 75% of global online and mobile ads are forecast to be delivered through AI-based programmatic advertising by 2023.
Report author Sam Barker noted: “Giving alogrithms access to the vast amounts of data generated by advertising traffic, including purchasing habits, user buckets and geographical location, is critical to enabling advertisers to secure a return on their ad spend.”

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