Digital ad revenues topped $100 billion for the first time, resting at a handsome $107.5 billion last year. An enviable growth rate of 22% in the U.S. year over year from $88.3 billion in 2017, according to a recently published IAB report.
IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC.
Just to put some perspective around the 22% growth rate, it’s extremely rare to see any industry grow at 20% or more per year for four consecutive years. The results are considered a reasonable measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the internet. The survey includes data concerning online advertising revenues from web sites, commercial online services, free email providers, and all other companies selling online advertising.
2018 was yet another record-breaking year for digital marketers in the U.S. according to Sue Hogan, IAB’s head of research, the market’s rocketing growth is led by two things: mobile channels and desktop. “I can’t vouch that this will happen forever,” she said. “But it’s still an impressive figure”. Hogan added that while time spent online saw a jump, the trend repeated across all the social platforms — users spent 22% more screen time on social media in 2018 than the year before, she said. Attributing the primary contributions of mobile and video platforms to this meteoric rise in digital marketing she said — “This is absolutely because of mobile and video”, adding that growth in these areas was hardly a surprise, thanks to their “ease of use”.
“Year after year, brands have been increasing their commitment to digital as a primary channel to reach consumers,” said David Silverman, a partner at PwC who oversaw the report.
The omnipresence of mobile advertising has prompted advertisers to embrace video content, which continues to show the largest revenue growth of all digital ad formats in 2018. On mobile devices alone, video saw the sharpest growth in the format category, up 65% in revenue compared to the year prior.
“When we look at digital video and do research around mobile, we certainly see a lot of shifts on the time spent,” Hogan explained. “If you look at time spent online, on mobile and social app from 2017 to 2018, you see this sizable spike”.
The analysis in this report highlights important drivers and trends that could influence interactive trajectory in the years to come, as marketers look to new formats and technologies to help them connect with consumers.