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The ad-supported web contributes over $1tn to the US economy according to the IAB

The ad-supported web contributes over $1tn to the US economy according to the IAB

A report from Harvard Business School commissioned by the Interactive Advertising Bureau (IAB) claims that the ad-supported internet contributed just over $1tn to the US economy in 2016.

The study, which looked into the economic value of the ad-supported online ecosystem, claimed the industry is responsible for 10.4 million jobs in the States, and accounted for 6% of the US GDP last year.

In total, the space produced $1.21tn for the US, representing a 20% compound annual growth rate since the last study was conducted in 2012.

According to the study, the industry created twice the number of jobs it accounted for in 2012. The annual growth rate of employment during this period came in at 19.6% and “far exceeded” the US total annual employment growth of the goods, construction and manufacturing sectors, which came in at 1.8% over the same timeframe.

The report put the upwards trends down to the rise of technology like online video, streaming, on-demand platforms, and e-commerce – which on its own accounts for almost one million jobs in the US. It also highlighted geographic diversity, stating that 86% of the ad-supported economy’s direct employment and value lay outwith “conventional” centres of industry like San Francisco’s Bay Area or New York’s Manhattan district, saying some of the more notable districts were in ‘Red states’ like North Corolina, Texas and Utah.

“This study makes clear how crucial the ad-supported digital sector is to the expansion of the broader US business landscape,” said Professor Deighton, who directed the current and earlier versions of the study. “The internet fills an ever-widening role as market-maker to the US 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.”

Randall Rothenberg, president and chief executive, IAB said that the research "underscored" the industry's ability to fuel the economy from coast-to-coast.

Dave Grimaldi, the IAB’s executive vice-president for public policy, told the Wall Street Journal the study wasn’t intended to stave of potential regulation or attention from the federal government. Centered around employment-based methodology, the study instead seeks to establish facts to “demonstrate the value of the industry to stakeholders including the public, advertisers and policy makers".

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Rebecca Stewart

Rebecca Stewart is The Drum's breaking news and social media reporter, covering how brands and media companies are using platforms like Snapchat, Facebook, Twitter and beyond.

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