Digital ad revenue tops historic $100bn mark

Digital ad revenue tops $100bn with mobile leading the way

Digital ad revenue reached an all-time high in 2018 at $107.5bn, according to a report released by the IAB and prepared by PwC.

The historic number marks a 22% year-over-year increase from $88.3bn in 2017.

Mobile and video are major contributors to the revenue growth. Mobile revenue $69.9bn, accounting for 65% of total revenue last year. Digital video revenue totaled $16.3bn, a YoY increase of 37% year making it the fastest growing format.

Projecting out, a report from eMarketer predicts that video ad spend will surpass $40bn, nearly half of which will be sold programmatically.

"Surpassing $100bn 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, chief executive officer of 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.”

Digital audio advertising grew to $2.3bn, outpacing last year's total revenue of $1.8bn. Social media revenue climbed to $29bn, a YoY increase of 31%.

“Digital marketing has unequivocally secured the lead in media market share, just as it has taken the lead in consumer mindshare,” said Anna Bager, executive vice-president of industry initiatives at IAB. “As audiences have shifted away from traditional media, digital has been a dominant force in capturing their attention—first from desktop to mobile devices and more recently to connected TV, smart speakers, and digital out-of-home.”

All signs point to digital revenue only growing, with Sue Hogan, senior vice-president of research and measurement at IAB, saying the coming 5G revolution will kick growth into high gear.

"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," said Hogan.

"As companies prepare for 5G—and its rollout gains momentum—we can anticipate even more healthy digital growth.”

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