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The digital advertising landscape in the United States has undergone rapid transformation over the past decade. Businesses are allocating increasingly larger portions of their marketing budgets to digital channels to effectively engage consumers. This year marks a pivotal moment for the digital ad market as spending surpasses the $300 billion milestone, driven by advancements in technology and evolving consumer behaviors.
This article examines the state of US digital ad spending, focusing on 2025 as a key year while exploring trends, historical growth, and forecasts through 2028.
US Digital Ad Market Growth: 2017–2025
Digital ad spending in the US has grown significantly, nearly tripling since 2017. Expenditures are projected to hit $324.9 billion, an 8.9% increase from 2024, when spending totaled $298.4 billion. This milestone underscores the growing importance of digital advertising in modern marketing strategies.
Year |
Digital Ad Spending (Billions) |
Annual Growth (%) |
|---|---|---|
| 2017 | $104.4 | — |
| 2018 | $129.2 | +23.8 |
| 2019 | $152.4 | +18.0 |
| 2020 | $189.3 | +24.2 |
| 2021 | $241.2 | +27.4 |
| 2022 | $250.1 | +3.7 |
| 2023 | $271.2 | +8.4 |
| 2024 | $298.4 | +10.0 |
| 2025 | $324.9 | +8.9 |
From 2017 to this year, US digital ad spending experienced a compound annual growth rate (CAGR) of 16.2%. Sustained growth is attributed to the rise of social media platforms, mobile advertising, video marketing, and programmatic ad buying.
What’s Driving Growth Now?
Several factors are contributing to the continued expansion of digital advertising:
Increased Internet and Mobile Usage
The number of internet users in the US has reached a record high, with more consumers relying on digital platforms for entertainment, shopping, and communication. Mobile devices now account for a majority of internet traffic, making mobile ads a cornerstone of marketing strategies.
Enhanced Video Advertising
Video remains one of the most effective ad formats. Streaming platforms like YouTube, TikTok, and connected TV services are driving video ad growth by providing highly engaging content opportunities.
Social Media Advertising
Social platforms such as Instagram, Facebook, TikTok, and LinkedIn remain key channels for businesses. Advanced targeting tools and interactive ad formats enable marketers to reach audiences with precision.
Programmatic Advertising
Automation in ad buying has revolutionized the industry. Programmatic advertising accounts for a significant share of digital ad spending, allowing businesses to optimize campaigns in real time.
eCommerce Integration
With the growth of eCommerce, brands are investing heavily in digital ads to attract and convert online shoppers. Platforms like Amazon and Shopify offer tailored ad solutions, enabling businesses to promote products directly to consumers.
US Digital Ad Spending Per Internet User
The average digital ad spend per internet user in the US has been steadily rising. This year, it is projected to surpass $1,000 per user for the first time, reaching approximately $1,025.30. This milestone highlights how integral digital advertising has become for businesses looking to maximize reach and engagement.
Over the long term, the per-user ad spend has increased significantly:
- 2017: $319.40
- 2024: $942.6
- 2025: $1,025.30
- 2026: $1,081
- 2027: $1,146
- 2028: $1,211
By 2028, US digital ad spending per internet user is expected to exceed $1,200, representing nearly a 280% increase since 2017.
US Digital Ad Spending by Industry
Spending on digital ads varies widely by industry, with certain sectors leading the charge. Retail is once again the top spender, accounting for 27.9% of total US digital ad expenditures. Retailers prioritize digital platforms to attract consumers and drive online sales.
Other significant contributors include:
- Consumer Packaged Goods (CPG): Representing 15% of the market, CPG companies invest heavily in brand-building campaigns across digital channels.
- Financial Services: Accounting for 11.4%, this sector focuses on customer acquisition through paid search, display ads, and video platforms.
- Healthcare and Pharmaceuticals: This industry is increasing its digital ad spend to educate consumers and promote health-related products and services.
- Automotive: Digital ads are playing an essential role in car marketing, from virtual showrooms to personalized targeting.
Future Forecast: 2026–2028
The US digital ad market is expected to maintain steady growth in the coming years. Projections indicate that spending will reach $351 billion in 2026, $376.5 billion in 2027, and surpass $400 billion by 2028.
From 2025 to 2028, the average annual growth rate is forecast to be 7.5%, a slight deceleration compared to earlier years. This reflects the market’s increasing maturity, though sustained growth underscores the ongoing importance of digital advertising.
Challenges Facing Digital Advertising
Despite its growth, the digital ad market faces several challenges:
Ad Fatigue
With consumers exposed to a high volume of ads, engagement rates may decline. Businesses need to focus on creating compelling, personalized content to stand out.
Privacy Regulations
Stricter data privacy laws, such as GDPR and CCPA, limit the ability of advertisers to track and target users. Compliance with these regulations requires innovation and adaptation.
Rising Costs
As competition for digital ad space intensifies, costs are increasing, making it harder for smaller businesses to compete with larger corporations.
Opportunities for Growth
Emerging Technologies
Innovations in AI, augmented reality (AR), and virtual reality (VR) are creating new possibilities for immersive and interactive ad experiences.
Personalized Advertising
Leveraging first-party data allows businesses to deliver highly relevant and personalized ads, improving engagement and return on investment.
Expanding eCommerce
As online shopping continues to grow, particularly in sectors like groceries, fashion, and electronics, digital advertising will remain a critical tool for businesses to attract and convert customers.
This year, US digital ad spending is set to reach $324.9 billion, marking a significant milestone as it surpasses $300 billion for the first time. The consistent growth of the digital ad market reflects its central role in modern marketing strategies. While challenges such as privacy regulations and rising costs persist, emerging technologies and personalized campaigns present exciting opportunities for the industry.
As businesses continue to adapt to evolving consumer behaviors and leverage digital platforms, the future of digital advertising in the US remains bright. With projections pointing toward $400 billion in annual spending by 2028, digital ads will continue to shape the way brands connect with their audiences.
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