US digital advertising breaks $100BN barrier
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Michelle Clancy
| 08 May 2019

US digital advertising revenues in 2018 reached an all-time historic high of $107.5 billion, exceeding the $100 billion mark for the first time.

That’s according to the latest IAB Internet Advertising Revenue Report, released by IAB and prepared by PwC US.

This full-year 2018 total represents a 22% year-over-year increase from $88.3 billion in 2017.

Mobile and video continue to lead digital marketing’s steady growth, the study found. Accounting for nearly two-thirds (65%) of 2018’s internet ad revenues, mobile reached $69.9 billion in 2018, up 40% from the previous year at $50.1 billion.

Advertising revenues from digital video saw the largest rise among all formats—an uptick of 37%—catapulting to $16.3 billion in 2018 from $11.9 billion in 2017. Digital video on mobile devices specifically also continued its momentum, reaching $10.2 billion in full-year 2018, a 65% rise from full-year 2017 at $6.2 billion. Digital video ad revenues on mobile devices also comprised 63% of all digital video ad revenues in 2018, up from 52% in the prior year.

"Advertisers are placing a premium on mobile and video, and in turn, the two are fuelling the ongoing rise of digital marketing,” said Sue Hogan, SVP, Research and Measurement, IAB. “And the 5G promise of lightning fast speed and decreased latency presents opportunities for businesses and consumers alike: a smoother user experience, which could further consumer ease with use and frequency of ecommerce on small screens; and it would allow for greater innovation in ad formats. As companies prepare for 5G—and its rollout gains momentum—we can anticipate even more healthy digital growth.”

With the rise of “social stories” as a tool to connect with today’s consumers, the report pinpoints social media as a motivating factor in significant investment, said the firm: “With storytelling now catching fire across platforms and brands. In addition, technological advances, ranging from virtual reality to voice to 5G, were recognised as drivers and expected contributors to a continued robust advertising environment.”

Social media revenue rose to $29 billion in 2018, an increase of 31% from $22.1 billion in the previous year.

"Surpassing $100 billion in annual revenue is a watershed moment for the digital advertising ecosystem—one built on its power to build direct relationships between brands and today’s consumers,” said Randall Rothenberg, CEO, IAB . “Innovative platforms like over-the-top television, podcasts, virtual reality and augmented reality all have the potential to help marketers forge even stronger ties with audiences, as brands navigate the new ‘consumer first’ playing field.”