A digital ad industry has exploded in the past few years.
It’s now one of the largest in the world, and it’s all thanks to a handful of companies that are rapidly gaining access to the billions of dollars that go into digital marketing campaigns.
But it’s not the only industry seeing a boom.
The digital ad market is still relatively small, with about 2.5 million ad campaigns running across more than a billion pages of content on the web, according to a new report from PwC.
And digital ad revenue continues to shrink, with a mere $3.2 billion in ad revenue in 2015, according a 2015 report from PricewaterhouseCoopers.
“It’s not as large as you think,” said Ben Davenport, managing director of PwLabs, a consultancy that analyzes online advertising and leads-to-market trends.
Davenport said that as the market has grown, so has the opportunity for companies to reach more people.
“They can do things like show a more organic, more organic experience,” he said.
The market has been growing faster than other sectors, though, and Davenpents point to the $8 billion that Facebook generated last year as proof of its continued dominance.
PwC also said that advertising revenue grew 15% last year, from $3 billion to $4.2 bn.
Digital ad spending grew more than 20% to $9.1 billion in 2015.
And it’s getting more attention.
As the digital advertising landscape continues to change, the industry is finding itself in a unique position to benefit from it.
Companies are looking to digital marketing as a way to build brand awareness, boost conversion rates, increase engagement, and attract new audiences, said Matt Miller, senior vice president of digital marketing at the ad-tech company Acxiom.
While the traditional marketing model still plays a role, companies are increasingly targeting audiences online, with Facebook’s “Trending Topics” feature, Twitter’s ad-free platform, Instagram’s “Instagram Stories,” and Pinterest’s “Pinterest Stories” serving as platforms for marketers to get their message out to a broader audience.
In many cases, companies that have been in the digital market longer are able to capitalize on this trend by offering a cheaper or more convenient way to reach a wider audience, said Miller.
For example, Instagram recently launched a “New Product” section in the “About” section that lets marketers target potential new customers.
The company is also testing a mobile ad platform, which is now available for iOS and Android devices.
This new advertising model could lead to greater revenue growth in the long run, but for now, Davenports hopes that the ad industry will remain focused on delivering great experiences for consumers.
“We’re going to see this continue for years to come,” he told Mashable.
“It’s just a question of when it starts to catch up to the traditional model.”
The growth of digital advertising is only the beginning of the digital growth story.
PwLaboratory research released by the consulting firm in November found that ad revenue growth could reach $100 billion by 2020, driven largely by social media advertising.
Advertising is growing at an even faster rate than digital sales.
In 2015, ad revenue was up 13% year-over-year, according the report.
But digital ad spending is still just 5% of the overall ad market, and even the smallest companies are seeing a steep decline in revenue.
More: Advertisers say they’re not going anywhere but down, and they’re ready for a shakeup