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Gartner: Cloud Ads a Big Chunk of Total Cloud Revenues

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Gartner: Cloud Ads a Big Chunk of Total Cloud Revenues

March 30, 2016
By Laura Stotler
TMCnet Contributing Editor

Cloud infrastructure and services have been on a massive growth trajectory for a while now, providing significant revenue sources for companies like AWS and Google as well as Microsoft (News - Alert), which has been steadily shifting to a cloud business model. Out of all the valuable software-as-a-service (SaaS) offerings flooding the market, there’s one niche in particular that stands out as both spectacular and disruptive: the area of cloud advertising.

According to Gartner (News - Alert), cloud advertising brought in roughly $79.4 billion of the $175 billion in cloud revenues last year. And it’s set to jump to $90.3 billion this year, of total cloud revenues of $204 billion. The reason for this outstanding growth rate is very simply that cloud advertising enables companies to put niche products and services directly in front of the eyes of their potential customers, no matter where they may be or what type of device they happen to be using.

Gartner goes on to describe the cloud advertising market as the use of cloud-based or SaaS (News - Alert) for the selection, transaction and delivery of both advertising and, maybe even more importantly, ad-related data. The content and price of the ads are determined on the fly, based on the end user and access mechanism, in an intelligent way to match ads with the best recipients. And the accompanying ad-related data offers a goldmine of demographic info on potential customers, which can help guide entire advertising and marketing campaigns.

“Typical online advertising in terms of traditional display ads are a static or flash image and call-to-action text,” according to Persistence Market Research, which has also done extensive research on cloud advertising. “By contrast, cloud advertising pulls in the social and real-time aspect of the Web into banner ads. The cloud-based component in this type of advertising allows brands to program display advertisements with content management systems, APIs, [and] video servers, and makes it easier to swap out or update components like lead generation forms, polls and white papers based on what's trending in the online world.”

The company forecasts healthy growth for the market through 2022, fueled by improved functional capabilities coupled with cost effectiveness. Growth will only be slowed by issues of data security and privacy, as businesses flesh out exactly how to protect consumers and sensitive data within the cloud. But for the time being, cloud advertising is realizing enormous potential and fueling the growth of cloud infrastructure and giants like Microsoft, Google (News - Alert) and AWS.

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