IAB: Ad-supported internet brings over $1T, 10M jobs to US economy
- The Interactive Advertising Bureau (IAB) commissioned a study titled "The Economic Value of the Advertising-Supported Internet Ecosystem" which found ad-supported internet is responsible for providing 10.4 million U.S. jobs, making up 7.3% of total non-farm employment, according to a press release.
- The economic impact of the ad-supported internet market translated to $1.121 trillion in 2016, or 6% of gross domestic product (GDP), per the findings, doubling economic contribution since 2012. From 2012 to 2016, those figures represent a 20% compound annual growth rate, which is 5x the U.S. average growth over the same period.
- "This study makes clear how crucial the ad-supported digital sector is to the expansion of the broader U.S. business landscape," said Professor John Deighton, who directed the current and earlier versions of this research, in statement. "The internet fills an ever-widening role as market-maker to the U.S. economy, first as a retail platform, next complementing traditional advertising media, then becoming a mobile platform to reach people on the move and now as a platform to make markets in on-demand services. It is little wonder that it’s growing at 20% per year."
The report emphasizes not only the value the ad-supported internet currently contributes to the U.S. economy, but also how its impact will only grow more outsized in importance as more consumers adopt digital- and mobile-first mindsets. While ad-supported internet's value is clearly enormous, the sector still has considerable hurdles to overcome, such as ad blocking technology and fraud, which affect marketers, ad tech vendors and publishers alike.
As an illustration of how widespread the ad-supported internet's impact is, the study pointed to the surprising figure that 86% of direct employment and value for the market are now found outside its "conventional centers," i.e. San Francisco, New York and the Seattle/Tacoma area, among others.
"The internet has become central to Americans' day-to-day lives as they read, watch, shop and connect on digital screens," said Dave Grimaldi, executive vice president of public policy at the IAB, in a statement.
Online video was the most significant driver of new internet traffic over the past four years, with the report singling out the advent of over-the-top TV services entering the mainstream as the key reason. Marketers and platforms including Facebook and Google have accordingly started to pivot focus toward digital video strategies, and will likely continue to do so.
Other sectors outlined for growth include e-commerce, on-demand platforms, user-generated content platforms, music-streaming services and cloud computing. User-generated content, especially on platforms that emphasize it like Facebook, is shown to have higher engagement rates than brand-generated content and more traditional advertising.