Smart Advertising Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Product Type (Interactive Kiosk, Digital Billboard, Digital Poster, Others), By End-Users (Corporate, Government, Education, Food and Beverage, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global smart advertising market size was valued at USD 1.51 billion in 2023. It is estimated to reach USD 7.33 billion by 2032, growing at a CAGR of 19.2% during the forecast period (2024–2032). In recent years, the Internet and mobile phones have rapidly penetrated worldwide owing to the rise in digitization. This has led to a prominent shift towards connected TVs and OTT platforms from conventional ones, thereby driving the global smart advertising market. Moreover, the launch of new and innovative smart advertising by key players and emerging start-ups is anticipated to generate opportunities for the market.

Smart advertising refers to using advanced technologies and data-driven strategies to optimize the effectiveness and efficiency of advertising campaigns. It involves leveraging artificial intelligence, machine learning, big data analytics, and other cutting-edge technologies to target the right audience, deliver personalized messages, and maximize advertisers' return on investment (ROI).

Smart advertising enables advertisers to create personalized ad experiences for individual users. This can include dynamic ad content that adapts based on user behavior, location-based targeting, and retargeting advertisements to re-engage users who have previously interacted with the brand. Smart advertising aims to make advertising campaigns more efficient, cost-effective, and impactful by leveraging data and technology to provide relevant messages to the right audience at the right time.

Highlights

• Hardware dominates the component segment
• Digital billboard dominates the product type segment
• Corporate dominates the end-user segment
• North America is the highest shareholder in the global market

Market Dynamics

Global Smart Advertising Market Drivers

Shift Towards Connected TV (CTV) and OTT

The transition towards Connected TV (CTV) and Over-the-Top (OTT) platforms is a significant driver in the smart advertising market. Industry projections indicate that the global number of CTV users exceeded 1.1 billion in 2022, showing a remarkable 19% year-over-year increase. In 2022, the global OTT market was valued at USD 202.5 billion and is expected to grow to over USD 434.5 billion by the end of 2027. Traditional TV advertising has grown less effective due to the popularity of streaming services and linked TV devices, leading marketers to shift their expenditures toward digital platforms.

Furthermore, CTV and OTT offer targeted advertising opportunities, allowing advertisers to reach specific audience segments precisely. These platforms provide valuable data insights and analytics, enabling advertisers to optimize campaigns for better performance and ROI. Moreover, CTV and OTT advertising offer non-skippable ad formats, ensuring higher viewer engagement than traditional TV ads. Smart advertising solutions designed for CTV and OTT environments present lucrative opportunities for advertisers to connect with audiences in the changing digital media landscape as consumer behavior continues to favor on-demand and streaming content consumption.

Rapid Digitalization

Rapid digitalization is a primary driver propelling the growth of the smart advertising market. According to Statista, during January 2024, there were 5.35 billion internet users globally, representing 66.2% of the world's population. Of the entire population, 5.04 billion people, representing 62.3% of the global population, were using social media. With this exponential increase in internet users globally and the widespread adoption of smartphones and other connected devices, digital platforms have become the cornerstone of modern communication and commerce.

Furthermore, the proliferation of social media, streaming services, and e-commerce platforms has created vast opportunities for advertisers to effectively reach and engage with their target audiences. Likewise, the COVID-19 pandemic has accelerated the shift toward digital channels as consumers increasingly rely on online platforms for entertainment, information, and shopping. This digital transformation has necessitated a paradigm shift in advertising towards data-driven, personalized approaches, driving the demand for smart advertising solutions that can effectively navigate and capitalize on this evolving digital ecosystem.

Global Smart Advertising Market Restraint

High Initial Investment 

High initial investment poses a significant restraint on adopting smart advertising strategies. Implementing smart advertising solutions often demands substantial upfront technological, talent, and infrastructure expenditures. Small and medium-sized businesses, in particular, may find it challenging to justify these costs, delaying their adoption of innovative advertising approaches.

The initial investment encompasses expenses related to acquiring and integrating advanced advertising technologies, hiring skilled personnel proficient in data analytics and machine learning, and establishing robust infrastructure to support sophisticated advertising campaigns. Moreover, the risk associated with such investments may deter stakeholders from fully embracing smart advertising.

Global Smart Advertising Market Opportunities

Launch of Novel Smart Advertising Solutions

The market players in the smart advertising industry are launching novel and innovative solutions that enhance the features and functionalities of these advertisements. For instance, in September 2020, in-store advertising experts Smart Media was pleased to introduce a new in-store digital innovation: the double-sided digital hanging boards. These digital boards are ideal for capturing the attention of modern, busy clients. The new product will be available at 14 prominent Dis-Chem stores around the United States.

Furthermore, many start-ups are also anticipated to enter this thriving market in the future with the launch of their new solutions. For instance, in August 2023, Matt Watson, a prosperous serial entrepreneur and angel investor from Kansas City, introduced a new brand called At Capacity. This smart advertising platform is designed for small business owners in the home services sector, such as plumbing, HVAC, and electrical work. Such advancements are anticipated to create opportunities for market expansion.

Regional Analysis

North America Dominates the Global Market

Based on region, the global smart advertising market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global smart advertising market shareholder and is expected to expand substantially during the forecast period. The early adoption of emerging technologies for customer engagement and business growth drives the smart advertising market in North America. The United States has the highest percentage of individuals using connected TV boxes in their homes, with over 87% of the population owning these devices. In 2020, American CTV viewership was 45.7 million for Gen Z, 56.5 million for millennials, 48.5 million for Gen X, and 32.8 million for baby boomers, totaling 183.5 million viewers. Moreover, viewers shifting to streaming services directly contribute to the rise in connected TV advertising expenditure in the coming years. The U.S. Connected TV marketing expenditure increased to USD 8.11 billion in 2020 and continues to grow. Therefore, the rising adoption of connected TVs is anticipated to expedite the market in this region.

Furthermore, the market players in this region are entering into partnerships to introduce safe and secure solutions for advertisements. For instance, in March 2021, Smart, an independent ad tech platform, and White Ops, a global leader in protecting against sophisticated bot assaults and fraud, partnered to combat advertising fraud and invalid traffic. Complex fraudulent traffic presents a major risk to the digital advertising sector. Using White Ops technology, Smart will shield media buyers from fraud by examining bid requests for indications of automation before they reach any Demand-Side Platform (DSP). Consequently, all these factors augment the North American smart advertising market growth.

Asia-Pacific presents immense growth opportunities for the smart advertising market, driven by rapid urbanization, an expanding middle-class population, and rising smartphone penetration. Countries like China, Japan, and India are witnessing a surge in digital advertising expenditure, propelled by the flourishing e-commerce sector, increasing internet connectivity, and changing consumer preferences towards online shopping. Moreover, the regional market players are introducing innovative solutions for smart advertisements.

For instance, in April 2023, K Media Marketing Sdn Bhd (K Media) introduced the IoT vending machine, a major achievement for the company's media group. The IoT vending machine, developed in collaboration with social business company Allegra Technologies Sdn Bhd, provides advertisers with a new and unique advertising platform while meeting customer demands. The machine can instantly gather and analyze data, providing personalized product suggestions according to customer preferences. This is estimated to foster the Asia-Pacific market expansion.

Segmental Analysis

The global smart advertising market is segmented by components, product type, and end-user.

Based on components, the global smart advertising market is bifurcated into hardware, software, and services. 

The hardware segment is estimated to be the largest contributor to the market. Smart advertising hardware refers to physical devices or equipment incorporating advanced technology and capabilities to deliver targeted and interactive consumer advertisements. This segment is expected to experience rapid growth over the forecast period because of the rising adoption of outdoor digital billboards, indoor digital posters, and interactive kiosk networks by DOOH media businesses globally. These are electronic displays, usually LCD or LED screens, that are used in public areas like streets, train stations, airports, and malls to display advertisements. They are frequently network-connected for remote management and content updates and can display dynamic content.

Based on product type, the global smart advertising market is divided into interactive kiosks, digital billboards, digital posters, and others.

The digital billboard segment owns the highest market share. A digital billboard is an advertising display that uses LED or LCD technology to present dynamic, high-resolution images and videos. Unlike traditional static billboards, which display printed advertisements, digital billboards can change their content remotely and in real time. This flexibility allows advertisers to display multiple messages, rotate advertisements, incorporate animations, and even schedule specific content to appear at certain times of the day. In order to draw the attention of passing cars and pedestrians, digital billboards are frequently located in busy places like highways, cities, and retail centers. They offer advertisers greater flexibility and interactivity compared to traditional static billboards.

Based on end-users, the global smart advertising market is divided into corporate, government, education, food and beverage, and others. 

The corporate segment dominates the global market. In the corporate realm, smart advertising thrives on data-driven insights, precise targeting, and advanced technologies. Leveraging analytics and AI, companies craft personalized campaigns tailored to individual preferences. These strategies span multiple channels, including digital platforms and interactive formats, ensuring cohesive brand experiences. Real-time optimization and cross-channel integration maximize engagement and ROI while emerging technologies like blockchain and IoT offer innovative opportunities. Smart advertising is about reaching consumers and engaging them meaningfully, fostering lasting connections that drive business growth in today's dynamic market landscape.

Impact of covid-19

People's lives and companies were affected by the COVID-19 outbreak worldwide. During the COVID-19 outbreak, delivery service companies confront several obstacles. Due to the tight restrictions, more people are purchasing online. In response, e-commerce and online retail & grocery enterprises faced a big issue in delivering groceries on time. By assigning delivery executives optimal routes, route optimization software helped to reduce vehicle idling time and enhance delivery executive productivity, therefore promoting the route optimization software business during the pandemic crisis.

Recent Developments

• January 2024- Instacart announced that they are facilitating in-store digital marketing through smart cart advertising. The grocery aggregator is conducting a pilot test of advertisements on the displays of its Caper Cart smart shopping carts at Bristol Farms stores in Southern California. The advertising allows for real-time targeted messaging and will be expanded to more grocers in the future.
• February 2024- Walmart announced that they are acquiring Vizio for USD 2.3 billion to enter the connected TV advertising market. The firms have announced an agreement for Walmart to acquire Vizio, a prominent provider of affordable TV sets and connected TV advertisements in the U.S.