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IAB Media Digital Advertising

IAB: video driving all-time high in digital ad spend

By Andrew Blustein, Reporter

October 21, 2019 | 4 min read

US digital advertising spend for the first half of 2019 totaled $57.9bn, an all-time high for the first six months of a year, according to a report from the IAB and PwC US.

Digital ad spend hit $57.9bn for the first six months of 2019

Digital ad spend hit $57.9bn for the first six months of 2019

The record total marks a 17% uptick from the previous half-year mark. Video advertising saw the fastest level of year-over-year growth at 36%, totaling $9.5bn.

Sue Hogan, senior vice-president of research and analytics at the IAB, said the rise of non-traditional forms of video, namely connected TV and social video stories, has given advertisers new ways to reach younger audiences cutting the cord.

“Digital video growth has played a key role in giving 2019 the strongest opening six months in digital’s history,” said Hogan. “Increasingly, advertisers are turning to social video stories and connected TV to reach a growing audience of ‘cord-nevers’ – a younger cohort who’ve never subscribed to cable television and cannot be reached via linear TV ads. Indicators show CTV and addressable TV are on the rise.”

The ad world notices that rise, too. Roku and The Trade Desk are building measurement tools for CTV. YouTube is bringing its digital ad products to the plugged-in big screen. Tubular Labs wants to standardize social video measurement.

Mobile advertising accounts for the chunk of digital ad spend at $40bn, a 29% increase compared to the previous year.

Audio is on the rise, too. With the proliferation of smart speakers and the growing abundance of podcasts, audio spend totaled $1.2bn, a 30% increase compared to the previous year.

WarnerMedia recently announced the formation of a podcast-dedicated sales team as the company’s portfolio of brands readies to churn out a wealth of audio content.

The uptick in political advertising ahead of next year’s US presidential election is likely a key factor driving growth. As reported by The Wall Street Journal, digital ad growth for 2020 is expected to decelerate to 15% when excluding the influx of political ads.

The coming US privacy laws should also cause alarm for advertisers and media owners. Jim Spanfeller, chief executive officer of G/O Media, has said that it’s “impossible to predict” how the California Consumer Privacy Act (CCPA) will impact publishers.

The IAB has been lobbying Congress to enact a federal privacy law, with its chief executive Randall Rothenberg saying CCPA will hurt the industry’s bottom line.

“The uptick in revenues continues to be significant. IAB has joined forces with Privacy for America to advocate for national laws that will make it easier to protect consumer privacy, while continuing to fuel the digital economy,” said Rothenberg. “Further, innovation will likely be stifled when companies are forced to redirect resources to comply with an unwieldy patchwork of state-by-state regulations.”

IAB Media Digital Advertising

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