IAB: Digital ad spending jumped 23% in first half of 2017
- Spending on digital advertising reached an all-time high in the first half of 2017, according to a recent report by sponsored by the Interactive Advertising Bureau and prepared by PwC. Spending reached $40.1 billion in the first six months, representing a 22.6% year-over-year increase.
- Mobile continued its lead as a top ad format, accounting for 54% of total digital ad revenues for a total of $21.7 billion in the first half of 2017. This is a 40% increase over the $15.5 billion in ad spend from the same time period in the year prior.
- Display-related formats, which the report says includes banners, rich media, sponsorship and video, grew 28% year-over-year for a total of $17.6 billion in the first half of 2017. Display advertising now represents 44% of total internet ad revenue, a slight increase from last year's 42%, per the report.
The news is good for the digital marketing landscape, suggesting it is weathering a tumultuous year just fine. While there has been a significant amount of attention paid in 2017 to issues with digital marketing like brand safety, fraud and a lack of transparency — issues that caused marketers like P&G and Unilever to reign in their spending at one point — the IAB's findings suggest they have not deterred marketers from investing in the channels where consumers are spending time.
Of course, some entities may be bigger beneficiaries of the increase in digital ad spending than others. The report doesn't break down individual businesses' revenues, but it does mention "revenue concentration" among the top 10 companies where online ad revenues are. The report says that these 10 ad-selling companies accounted for 75% of total ad revenues in Q2 2017, and that the percentage has fluctuated between 69% and 75% over the past decade.
One of the ongoing questions in the industry is the extent to which the duopoly of Facebook and Google dominate, which the findings suggest is continuing apace. At the same time, many of the major ad agency holding groups are facing growth challenges, including WPP, Publicis and Interpublic.
For marketers, being nimble and accessible is a hallmark of the new digital economy. For example, while mobile and desktop are often referred to as two distinct marketing channels, the industry shouldn't think of these spaces as separate. Instead, savvy marketers are now following consumers who constantly live online, hopping from smartphones to desktops to tablets and back, as the digital world has become a key part of everyday life in the U.S., PwC's David Silverman said in the report.
Many marketers are looking to programmatic, even as some question the technology's effectiveness due to a lack of control over where their ads appear online. Despite these issues, spending on programmatic is on the rise, at least in part because of its automated and efficient nature. Nearly two-thirds of all digital display ads will be programmatic by 2019 to hit $84.9 billion, per a recent estimate.
Highlighting that growth opportunity, anyone with an idea and credit card can jump into digital advertising and capture the attention of consumers, IAB's CEO Randall Rothenberg said in the report.
- Interactive Advertising Bureau IAB internet advertising revenue report conducted by PricewaterhouseCoopers (PWC)
- Marketing Dive 67% of display ads will be programmatic by 2019