IAB: US digital ad spend hits highest Q3 on record

Dive Brief:

  • U.S. advertisers spent a combined $17.6 billion on digital advertising in Q3 of 2016 for a 20% increase year-over-year from 2015, according to an Interactive Advertising Bureau (IAB) report provided to Marketing Dive.

  • The IAB report, which was prepared by PwC US, notes that this is the highest spending on digital advertising for a Q3 ever, and accounts for a 4.3% increase over Q2 2016.
  • “The momentum of advertising in mobile, digital video and other innovative formats is undeniable,” said David Doty, executive VP and CMO at IAB, in the release. “These record-setting third quarter revenue figures reflect marketers’ trust in the internet’s power to connect with today’s audiences.”

Dive Insight:

Earlier this year, eMarketer forecast that digital ad spend would beat out TV for the first time in 2017, and the latest from the IAB confirms that marketers’ interest in the channel is only continuing to ramp up heading into 2017, breaking record levels.

"Digital has become a critical part of advertisers’ marketing strategies," David Silverman, a partner at PwC US, said in a statement. "Increasing media consumption on interactive screens will surely lead to even more investment in the digital landscape."

As IAB’s Doty notes, one of the digital formats that has brands excited is digital video. The key area is live streaming, which has begun to offer stiff competition to linear TV when it comes destination viewing events such as sports. Digital platforms including Facebook, Twitter and Instagram have built out their streaming offerings accordingly, with major media partners jumping at the opportunity.  

However, digital still faces major headwinds. Marketers need to better account for forging ahead into next year. The issue of widespread ad block adoption, both on desktop and mobile, must be more forwardly addressed, with recently formed initiatives like the Coalition for Better Ads leading the charge. Surveys from the CMO Council in December show that 38% of marketers say their digital strategies still only produce mixed results at best, meaning a renewed focus must be placed on ad quality.

Accurate ad metrics on digital also continue to elude many. Facebook, one of the world’s two largest digital advertising platforms, has announced four major metrics errors since September, the most egregious of which suggests that viewability on Facebook video ads was over-inflated by up to 80% dating back to 2014.

Facebook recently held talks with the Media Ratings Council (MRC) about auditing and accrediting its measurements, and has attempted to usher in a new era of transparency with marketers that aims to properly disclose these issues before they spiral out of hand. 

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