KSA Digital Advertising Market Outlook to 2030

KSA Digital Advertising Market Overview

• The KSA Digital Advertising Market is valued at USD 1.62 billion, driven by increased internet penetration and widespread smartphone use among Saudi citizens. The rapid expansion of e-commerce platforms, coupled with the government's push for digital transformation as part of the Vision 2030 initiative, has boosted demand for online advertising channels. This market is primarily fueled by growing investment in sectors like retail, banking, and entertainment that increasingly rely on digital channels to engage consumers.
• Riyadh and Jeddah dominate the digital advertising landscape in Saudi Arabia, primarily due to their robust economic infrastructure and large consumer bases. These cities have a high concentration of businesses, which fuels the demand for digital marketing services. Riyadh, being the capital and a hub for multinational companies, often leads in digital ad spend. Jeddah follows closely due to its commercial importance and its role as a key e-commerce center.
• The Saudi government has introduced several policies aimed at fostering the growth of the digital economy. In 2024, the Digital Government Authority (DGA) implemented regulations that encourage digital business models, including e-commerce and digital advertising. These policies support innovation by reducing barriers to market entry and promoting competition within the digital sector. The government also offers incentives for businesses adopting digital transformation strategies, further enhancing the role of digital platforms in economic growth. These initiatives are aligned with Vision 2030s goal of increasing the contribution of the digital economy to Saudi Arabias GDP.

KSA Digital Advertising Market Segmentation

The KSA Digital Advertising Market is segmented by ad format, device type, platform type, end-user industry, and geographical region.

By Ad Format: The KSA Digital Advertising Market is segmented by ad format into display ads, search ads, video ads, social media ads, and classified ads. Social media ads have a dominant market share in 2023, attributed to the high penetration of platforms such as Instagram, Twitter, and Snapchat in Saudi Arabia. These platforms are increasingly used by businesses to reach younger audiences and are preferred due to their engagement tools, including influencer marketing and interactive content like polls and stories.

By End User Industry: The market is segmented by end user industry into retail & e-commerce, BFSI (banking, financial services, and insurance), healthcare, automotive, and media & entertainment. Retail and e-commerce dominate the digital advertising landscape in Saudi Arabia in 2023, driven by the rapid growth of online shopping and the increasing need for brands to build a strong digital presence. As consumer behavior shifts more towards online purchasing, retailers are channeling more of their budgets towards digital platforms.

KSA Digital Advertising Market Competitive Landscape

The KSA Digital Advertising Market is dominated by a combination of local companies and global giants. Leading players such as Google, Meta (Facebook), and Snapchat controls the market share, thanks to their ability to offer advanced targeting solutions. On the local front, companies like STC Media and AlArabia Outdoor have a strong presence due to their deep understanding of the regional market dynamics.

KSA Digital Advertising Market Analysis

KSA Digital Advertising Market Growth Drivers:

• High Internet Penetration: Saudi Arabia boasts one of the highest internet penetration rates globally, with over 34 million internet users in 2024, representing almost 95% of its population. This widespread digital connectivity is a crucial growth driver for digital advertising, as brands can reach nearly the entire population through online platforms. The Saudi governments focus on enhancing digital infrastructure, combined with the increasing use of high-speed broadband and 5G networks, further strengthens the digital ecosystem. The Kingdoms robust internet infrastructure facilitates the effective delivery of digital ads across multiple channels.
• Mobile-first Consumer Preferences: Saudi Arabia is a predominantly mobile-first nation, with 43 million mobile connections, exceeding its population due to multiple device ownership per user. Over 89% of internet users access the web through their smartphones, making mobile advertising a critical component of digital marketing strategies in the Kingdom. Mobile apps, social media, and gaming platforms are particularly popular for ad placements. With more than 28 million active social media users, platforms like Instagram, Snapchat, and TikTok are becoming prime avenues for advertisers to connect with mobile-centric consumers.
• Government Digital Transformation Initiatives (Vision 2030): Saudi Arabias Vision 2030 initiative is a catalyst for the growth of digital advertising. With a strong emphasis on digital transformation across sectors, the government aims to boost the digital economy by enhancing e-government services, digital infrastructure, and internet accessibility. In 2024, government-backed digital projects are valued at $15 billion, including initiatives to modernize public services, making digital platforms more essential for communication and advertising. These initiatives are expected to create an expanded digital landscape, providing opportunities for advertisers to engage with both consumers and businesses.

KSA Digital Advertising Market Challenges:

• Data Privacy Concerns: Data privacy has become a major concern in Saudi Arabia, especially with the rising number of cyberattacks. In 2024, Saudi Arabia witnessed over 7 million cyberattacks, affecting businesses and individuals alike. The government has responded by introducing the Personal Data Protection Law (PDPL), which restricts how companies can collect, process, and store personal data for advertising purposes. These stringent regulations pose challenges for advertisers in effectively targeting their audience, as compliance with data privacy laws requires some changes in data handling and ad targeting strategies.
• High Competition Among Platforms: The digital advertising landscape in Saudi Arabia is highly competitive, with global platforms like Google, Meta, and Snapchat dominating the market. These platforms offer advanced targeting capabilities, making it difficult for local and smaller platforms to compete. As of 2024, Google and Meta collectively control over 70% of the digital ad spend in the Kingdom, leaving limited room for smaller players. This high level of competition can drive up costs for advertisers, making it difficult to achieve high ROI without any budgets or innovative strategies.

KSA Digital Advertising Future Market Outlook

Over the next five years, the KSA Digital Advertising Market is expected to witness growth, driven by continuous investment in digital infrastructure and the widespread adoption of digital marketing strategies by businesses. The push towards online commerce and the government's focus on a digital economy under Vision 2030 will further fuel the expansion of this market. Social media advertising and video content are projected to remain at the forefront, while innovative formats such as interactive and programmatic ads will see rapid adoption.

KSA Digital Advertising Market Opportunities:

• Expansion in Social Media Advertising: Saudi Arabia is a leader in social media usage, with over 28 million active users in 2024. Platforms like Snapchat, Instagram, and TikTok have particularly strong followings among younger demographics, providing advertisers with vast opportunities for targeted marketing. In 2024, social media ad spending is expected to exceed $1.5 billion, driven by rising user engagement and the integration of e-commerce features within these platforms. Advertisers can capitalize on this trend by leveraging data-driven social media strategies to reach highly engaged audiences, particularly in sectors like fashion, retail, and entertainment.
• Increasing Video Ad Spending: Video content is becoming a dominant form of digital media consumption in Saudi Arabia, with YouTube and TikTok being the most popular platforms for watching online videos. In 2024, daily video consumption reached 115 minutes per user, up from 105 minutes in 2023. Advertisers are increasingly investing in video ads to capture audience attention, particularly through in-stream and shoppable video formats. This growing preference for video content provides a lucrative opportunity for brands to engage with their target audience through visually compelling and interactive ad formats.