IAB: Digital ad revenues pass $100B on mobile, video growth

Dive Brief:

• U.S. digital ad revenues hit $107.5 billion in 2018 for a 22% year-over-year increase, according to the IAB’s [ing]. Up from $88.3 billion in 2017, revenues surpassed $100 billion for the first time as consumers spent 20% more time online, outstripping a 1% increase in U.S. online audience. 
• Mobile revenue hit $69.9 billion, making up 65% of total revenue and representing a 40% increase from 2017’s $50.1 billion mark. Nearly three-quarters of internet time is spent on mobile, as time spent on mobile increased 31%, while desktop decreased 2%.
• Digital video revenue surged from $11.9 billion in 2017 to $16.3 billion in 2018 for a 37% increase that surpassed all other formats. Nearly two-thirds (63%) of video revenue came from mobile, up from 52%, and a similar number (62%) of video starts occurred on mobile. Meanwhile, digital audio ad revenue grew to $2.3 billion, up 23% from 2017.

Dive Insight:

The increase in digital ad revenues continues unabated with what IAB’s SVP of research and measurement Sue Hogan described as a “mind-blow[ing]” revenue milestone during an IAB webinar that presented the results. IAB expects developments in new and emerging technologies to spur further growth in the market.

“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,” said IAB CEO Randall Rothenberg in a [ing].

The IAB report is the latest study to confirm that [ing]. Plus, time spent and ad revenue on mobile are approaching parity, with 74% of time and 65% of revenue in 2018 compared to 68% of time and 57% of revenue in 2017. Still, only 14% of users are mobile-only and 65% use both desktop and mobile, meaning that marketers must still craft multiplatform campaigns to reach a majority of consumers.

Mobile is closely tied to the surge in digital video revenue, as video starts on mobile increased, as well. While most formats saw increases in revenue on mobile, with search and banner increasing 37% and 36%, respectively, video was up 65% over 2017. The growth of video reaffirms what marketers seem to know: that video — especially on mobile devices — is key to reaching tech-savvy, on-to-go consumers. That echoes previous IAB reports showing that brands will boost spending on video and that consumers are open to viewing ads in exchange for free digital video.

The report also highlighted the growth of the digital audio advertising market. Nearly two-thirds (64%) of people listened to digital audio in 2018, as the podcast audience increased 7% to 73 million listeners. While audio is only about 2% of total digital ad revenue, this is clearly a market with room to grow, especially in podcasts. The global podcast market is forecast to make up 4.5% of all audio advertising spend by 2022, hitting $1.6 billion, according to WARC research. That expected growth has kicked off a wave of consolidation that should bring greater scale, enhanced optimization and promotional opportunities for brands.