IAB: Digital Ad Spend Surpassed $20B In First Half Of 2013

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iab-h1-2013Digital ad spending in the first half of 2013 grew 18% year over year, according to the 2013 Half Year IAB Internet Advertising Revenue Report.

The increase marks the fifth consecutive year of double-digit growth in the first half. The IAB report, conducted by Pricewaterhouse Coopers, tracks and analyzes US Internet ad spending.

Mobile is especially hot, with revenues soaring 145% to $3 billion in the first half, up from $1.2 billion in the same period last year. “Mobile advertising’s breakneck growth is evidence that marketers are recognizing the tremendous power of smaller screens,” said Randall Rothenberg, president and CEO at IAB. Over the past year, the mobile ad format has grown from 7% to 15% of the overall online advertising pie.

Digital video was up 24% over the first half of 2012, taking in $1.3 billion. “The report not only confirms that brands are making a greater commitment to interactive, but also points to the fact that mobile and digital video are being identified as integral elements of the marketing mix,” said David Silverman, a partner at PwC.

Search revenues were up 7% as well, totaling $8.7 billion.

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Despite the excitement around mobile, display-related advertising, which included digital video, still accounted for 30% of revenues in the time period and was up 9% to $6.1 billion. The top three advertising verticals — retail, financial services and automotive — accounted for 46% of all ad revenue.

What’s perhaps most striking is the extent to which digital advertising’s 18% growth outpaced the total media market, which grew only 3% in the period, with national TV and magazines each up just 4%. Analysts see share shifts across all media, with much of digital’s growth coming from a movement of dollars into digital from other platforms.

According to PwC manager Michael Altschul, there’s a clear shift in spending from flat ad formats to more engaging formats, and the hardware is helping. “Mobile is becoming the first screen for many people,” he said. “There’s growth in the device market, and the devices have faster connections, bigger screens and higher resolutions. Publishers are creating ad units that translate well to this improved mobile platform.”

Agencies and media buyers are devoting an amazing amount of their attention to digital video and its delivery to smartphones and tablets, said Randy Cohen, president of advertiser perceptions. “They’re optimistic across all categories: automotive, packaged goods, financial and retail. We’re seeing them move dollars from display to mobile, and they’re indicating they’ll be spending more going forward. We see mobile video as a big growth area in the next 18 months.”

“Consumers are embracing new screens and new content, and are transforming how they shop, communicate and consume content at an accelerated clip,” said Sherrill Mane, SVP, research, analytics and measurement at IAB. “And, in response, marketers are turning to those same interactive arenas just as quickly.”

The full report is available at http://www.iab.net/AdRevenueReport.

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