Ad Trends: Digital Ad Revenues Grow 19% Year-over-Year in First Half of 2016, Hitting Record High of $32.7 Billion

connected consumer, digital advertising revenues, digital screens, IAB, immersive experiences, Interactive Advertising Bureau, Marketing, mobile screens, power of digital, Pr, Public relations, PwC US, Randall Rothenberg, real-time engagementThe Interactive Advertising Bureau (IAB) announced that digital advertising revenues in the U.S. for the first half of 2016 reached an all-time high, scaling to $32.7 billion, according to the latest IAB Internet Advertising Revenue Report, released by the industry trade group and prepared by PwC US—representing a 19-percent increase over last year’s then record-setting half-year revenues of $27.5 billion.

In step with that accelerated growth, revenue from the second quarter of 2016 reached $16.9 billion, an 18 percent increase over the $14.3 billion from the same time period last year.

“These half-year revenues are a testament to the role of digital screens—especially mobile screens—in consumers’ increasingly connected lives,” said Randall Rothenberg, president and CEO of IAB, in a news release. “Marketers and brands clearly recognize the innate power of digital to offer immersive experiences and secure real-time engagement.”

Other key highlights from the report include:

  • Mobile revenue saw the largest year-over-year change, climbing to $15.5 billion, up 89% from $8.2 billion in HY 2015, representing 47% of total internet advertising revenue
  • Taking a deeper dive into mobile, video on smartphones and tablets saw strong triple-digit growth, reaching $1.6 billion in HY 2016, an impressive 178% rise from HY 2015
  • Mobile search took a significant uptick, realizing $7.4 billion in HY 2016, a 105% increase compared to $3.6 billion in HY 2015
  • Total digital video, including mobile and desktop, rose to $3.9 billion in HY 2016, up 51% from $2.6 billion in HY 2015
  • Total search, including mobile and desktop, accounts for half of all internet ad revenue, and hit $16.3 billion in HY 2016, a 19% hike over the $13.7 billion generated in HY 2015
  • Total social media revenues, including mobile and desktop, surged to $7 billion in HY 2016, a 57% rise compared to $4.4 billion in HY 2015
  • Of the sector verticals measured, the top three continue to amass nearly half of all ad spend (46%)—retail (21%), financial services (13%), and automotive (12%)

“These numbers demonstrate the growing importance of mobile, showing us the increasing demand for digital video and search, available anytime, anywhere, in the palm of your hand,” said David Silverman, a partner at PwC US.

“Consumers’ appetite to enjoy media—in particular video and social media—on smartphones and tablets provides marketers with the opportunity to connect and interact with their customers while they are on the go, in a very personal environment,” said David Doty, executive vice president and CMO of IAB, in the release.

The following chart highlights half-year internet ad revenue since IAB began measuring it in 1996; dollar figures are rounded.

Historical Half Year Revenue Growth (in millions)
Year Revenue % Growth
HY 16 $ 32,739 19 %
HY 15 $ 27,481 19 %
HY 14 $ 23,091 15 %
HY 13 $ 20,066 18 %
HY 12 $ 17,028 14 %
HY 11 $ 14,941 23 %
HY 10 $ 12,127 11 %
HY 09 $ 10,900 -5 %
HY 08 $ 11,510 15 %
HY 07 $ 9,993 26 %
HY 06 $ 7,909 37 %
HY 05 $ 5,787 26 %
HY 04 $ 4,599 40 %
HY 03 $ 3,292 11 %
HY 02 $ 2,978 -20 %
HY 01* $ 3,720 -7 %
HY 00* $ 4,013 147 %
HY 99 $ 1,627 110 %
HY 98 $ 774 125 %
HY 97 $ 344 320 %
HY 96 $ 82
Total $ 215,001
Comparison of 2015 and 2016 Data (in millions)
Revenue (Ad Formats) Half Year
Half Year
2016
Half Year
2015
% Change

HY16/HY15

Difference

HY16-HY15

$ % $ %
Search 8,895 27 % 10,051 37 % -12 % (1,156 )
Classifieds and Directories 1,065 3 % 1,490 5 % -29 % (425 )
Lead Generation 947 3 % 931 3 % 2 % 16
E-mail – (reclassed into RM – now audio)
Mobile 15,518 47 % 8,230 30 % 89 % 7,288
Display-related
Digital Video Commercials 2,252 7 % 1,991 7 % 13 % 260
Display 3,385 10 % 3,751 14 % -10 % (366 )
Rich media 491 1 % 686 2 % -28 % (195 )
Sponsorships 186 1 % 350 1 % -47 % (164 )
Total Display-Related 6,314 19 % 6,779 25 % -7 % (465 )
Total 32,739 100 % 27,481 100 % 19 % 5,258
Revenue (Mobile Format Breakout)
Search 7,431 48 % 3,628 44 % 105 % 3,803
Display-Related
Display Banner / Rich Media / Sponsorship 6,004 39 % 3,714 45 % 62 % 2,290
Display Digital Video 1,628 10 % 585 7 % 178 % 1,043
Total Display-Related 7,632 49 % 4,299 52 % 78 % 3,333
Other 455 3 % 303 4 % 50 % 152
Total 15,518 100 % 8,230 100 % 89 % 7,288
Revenue (Mobile and Display Breakout)
Search 16,325 50 % 13,679 50 % 19 % 2,647
Display-Related
Display Banner / Rich Media / Sponsorships 10,066 31 % 8,501 31 % 18 % 1,565
Display Digital Video 3,880 12 % 2,577 9 % 51 % 1,303
Total Display-Related 13,946 43 % 11,078 40 % 26 % 2,868
Other 2,467 8 % 2,724 10 % -9 % (257 )
Total 32,739 100 % 27,481 100 % 19 % 5,258

 

 

Revenue (Pricing Models)

Half Year 2016 Half Year 2015
Impression-based 11,112 34 % 8,901 32 %
Performance-based 21,158 65 % 18,098 66 %
Hybrid 469 1 % 481 2 %

Read the complete report here.

IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The results are considered a reasonable measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertisements on the internet.

The survey includes data concerning online advertising revenues from web sites, commercial online services, free email providers, and all other companies selling online advertising. The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first and third quarters. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information.

Source: Business Wire; edited by Richard Carufel

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