We are almost one quarter into 2021, and economies are finally starting to open up after a year of turmoil due to the pandemic.
Let's look back to 2020 and see for ourselves how digital advertising overcame the global pandemic and became the preferred channel for most marketers across geographies.
We will also see which economies will be recovering & growing faster in the coming years.
But first, we would like to thank eMarketers for publishing the comprehensive dataset. You can find the raw file and summarized reports here.
The second part of this article will talk about the critical metrics for the most popular ad formats in programmatic advertising, which can be used as benchmarks for buying media online. This analysis is in continuation with our article published in June 2020, where we talked about similar benchmarks for the first half of 2020. This will help you compare how the key metrics - CTR & CPM have changed as the year came to an end.
So let's dig in right away.
Digital Advertising Spend Distribution by Regions
First, let's see how much each of the below regions contributes to the global digital advertising spends - Asia-pacific, Latin America, Middle-east & Africa, North America, Central & Eastern Europe, Western Europe.
In 2020, North America contributed 42% of the total digital advertising spend globally, followed by Asia-Pacific. As per the estimates, in 2021, the split is not going to change much.
Digital Advertising Spend Growth By Regions
Even though marketing & advertising budgets shrank in 2020, digital advertising spends continues to grow, though at rates lower than estimated earlier. Most marketers focus their marketing budgets towards digital channels, given the accelerated adoption of digital browsing & shopping among the users.
In 2020, North America saw the highest growth in online advertising spends compared to the previous year.
This year Middleeast & Africa is expected to see a surge of 28% in their spending on online channels, followed by North America, which is estimated to add another 25% to its digital advertising spends from last year.
One important thing to notice is that most advertisers bet on a good recovery this year since all regions are expected to grow their online advertising spends by at least 15%. The growth for all regions in 2020 was below this mark.
The trend is set to continue in 2022 and in further years as well. You can get more insights by regions and countries up to the year 2025 here.
Mobile Advertising Share in Digital Advertising by Region
Mobile is already taking a significant chunk of digital advertising across the globe. The Asia Pacific leads in terms of advertising on mobile devices, with 84% of all the digital media spend going towards mobile ad spending in 2020. Latin America stands in second place, with 74% of the overall digital advertising spends in the region happening on mobile.
Only Middleeast & Africa saw less than 50% of its digital advertising dollars going through mobile devices. This is estimated to change by 2022 when over 53% of digital advertising budgets in the region will go through handheld devices.
Now let us see how different ad types - Native, Video & Display performed in the last five months - Nov 2020 to Mar 2021. We will look into two key metrics here - CTR & CPM.
CPM or Cost Per Mille is the most common way that advertisers purchase ad inventories on programmatic platforms. It is the price that they are ready to pay for 1,000 impressions (one impression is when the ad appears in front of a user). CTR or Click Through Rate is the ratio of the number of users clicking on the advertisement vs. the number of impressions.
The data set used here includes ad inventories worldwide, amounting to a total of 4.5 Billion ad requests.
In the later part of 2020 and early 2021, Videos remained the most interactive (with the highest CTR) form of creatives in the programmatic space.
The average CTR for video ads was as high as 2% in November across the geographies and industries. The CTR for native and display ads was around 0.5% for most months, with users interacting more with display ads than native ads in December, January, and February. This seems like an anomaly since Native ads are seen as more engaging than simple display ads. But with the right messaging and creative approach, display banners can also produce the desired results.
In terms of CPM rates, video ads were, without doubt, the most expensive, with the price reaching over $6 in the months of November & December before dipping to $3.24 in January this year. This shouldn't be a surprise since video ads are undoubtedly the most clicked (engaging) ad types among the three.
Display ads were the least expensive ad types throughout the year, with CPM rates well below $1, making it the most popular ad format among the advertisers.