Growth Trends

• The data shows a consistent upward trend in advertising spending across all categories from 2017 to 2028. For instance, Search Advertising grows from $105.3 billion in 2017 to $417.4 billion in 2028, indicating strong market demand and increasing reliance on digital advertising.
• Video Advertising also shows significant growth, from $35.5 billion in 2017 to $241.9 billion in 2028. This suggests a shift towards video content in marketing strategies, likely driven by consumer engagement trends.

Category Performance

• Search Advertising remains the dominant category throughout the years, indicating its effectiveness and importance in marketing strategies.
• Banner Advertising shows steady growth but at a slower pace than Search and Video Advertising, which may suggest saturation or changing consumer preferences.
• Influencer Advertising and Audio Advertising have lower absolute values but demonstrate growth potential, particularly as social media and audio platforms continue to evolve.

Market Dynamics

• The overall growth in advertising spending reflects broader trends in digital transformation, where businesses increasingly allocate budgets to online platforms.
• The relative growth rates of different advertising types can indicate shifts in consumer behavior and preferences, which are critical for understanding market dynamics.

Investment in Digital Transformation

With the increasing number of internet users and digital media consumption, there is a clear opportunity for investment in digital transformation initiatives. Companies that are enhancing their digital capabilities, such as adopting advanced analytics, improving online customer engagement, and optimizing their digital marketing strategies, should be prioritized. This aligns with the broader market trend towards digitalization.

Scenario Analysis for Strategic Planning

Implement scenario analysis to evaluate how different market conditions might affect potential investments. For instance, consider how a prolonged geopolitical conflict or sustained inflation might impact consumer spending and business investment. This analysis will help in making informed investment decisions and preparing for various economic scenarios.

Insights

• Gen Z has a significantly higher percentage of starting their online product searches on social media platforms (like TikTok, YouTube and Instagram) compared to the general public. This indicates a stronger preference for visual and interactive content among younger consumers, which could influence product marketing strategies.
• Diverse Search Preferences: While both groups show similar percentages for search engines (42% for both), Gen Z has a notably higher percentage for platforms like YouTube (25% for total vs. 42% for Gen Z). This suggests that Gen Z relies more on video content for product discovery, highlighting the importance of video marketing in reaching this demographic.
• E-commerce Dominance: Both groups show significant engagement with e-commerce platforms, particularly Amazon (56% for Gen Z vs. 37% for total). However, Gen Z's higher percentage indicates a trend towards online shopping, which could be crucial for evaluating potential investments in e-commerce businesses or platforms targeting younger consumers.

Recommendations for Private Equity Firms

• Prioritize Brands with Strong Social Media Presence, Specially in Short-Form Video Content: New generations, particularly Gen Z, initiate their product discovery primarily through social media platforms. Brands that have established a strong presence on platforms like Instagram, TikTok, and YouTube are more likely to engage effectively with younger consumers.
• Look for Opportunities to Add Video Content Capabilities: If a brand does not currently have a robust social media or video content strategy, there may be opportunities to enhance its value through strategic investments in these areas and improve the company's positioning.