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IAB: U.S. Digital Ad Revenues Climbed 21 Percent to $88 Billion in 2017

Business

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Mobile came up big accounting for $49.9 billion or 57% of overall digital ad spend.

According to the latest Internet Advertising Revenue report from PricewaterhouseCoopers (PwC) and the Interactive Advertising Bureau (IAB), digital ad revenue is up 21.4 percent year-over-year translating into an $88 billion market. Per PwC, and as highlighted by Marketing Land, this uptick is greater than the digital revenue of the newspaper industry as a whole.

Here are a few key highlights from the research:

  • Mobile accounted for 57% or $49.9 billion of digital ad spend representing a 36% increase compared to 2016
  • Social media advertising increased 36% to 22.2 billion, representing roughly one-quarter of all online ad revenue.
  • Total video ad revenue (mobile and desktop) increased 33% to $11.9 billion.
  • Total search revenue (mobile and desktop) grew 18% to $40.6 billion, up from 34.6 billion in 2016.
  • Total banner ads (mobile and desktop) totaled $27.5 billion in 2017, a 23% increase from 2016. 67% of this revenue was derived exclusively from mobile banners.
  • Total audio revenue (mobile and desktop) is up 39% to $40 billion.

Further, this report represents the first instance in which mobile video surpassed desktop video. For reference, in 2016 mobile video accounted for $4 billion in revenue compared to desktop at $4.9 billion. In 2017, mobile revenue grew to $6.2 billion while desktop reached $5.7 billion.

“Smartphones and tablets have become indispensable tools in the hands of consumers, from the moment they wake up to right before they go to sleep. A double digit uptick in spend on mobile video is testament to both the pull of mobile and consumer’s never-ending demand for sight, sound, and motion—even while on-the-go,” explained Anna Bager, Executive Vice President of Industry Initiatives at IAB in an official press release announcing the report.

As far as which companies are responsible for driving digital’s overall dominance, the report claims that “individual company information is held in strict confidence with PwC,” though it was revealed that the top 10 companies were responsible for approximately 74 percent of the overall revenues. Moreover, two companies accounted for the majority of this share that likely won’t come as a surprise: Google and Facebook. Specifically, Pivotal Research analyst Brian Wieser estimates that the duopoly accounted for 90 percent of this growth.


Image via Marketing Land

Per AdExchanger, the rise of self-serve advertising has played a significant role in continue dominance of the Duopoly. By democratizing targeted media buying, Google and Facebook have opened the floodgates to small to mid-market businesses, including direct-to-consumer startups, whereas other platforms have been slow to build out tools to their key customer segments.

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