2012 was another banner year for the online advertising space, with revenues up 15% over 2011. Mobile and digital video led much of that growth.
Mobile ad spend grew 111% compared to 2011, the second year of triple-digit growth, accounting for 9% of total internet advertising revenue at $3.4 billion. Digital video revenue increased 29% to $2.3 billion, up from $1.8 billion in 2011. Total online ad spend for the year was $36.6 billion.
“The impact of multiple screens and people spending more time in front of multiple devices is one of the trends we believe is driving such a large growth rate,” said David Silverman, a partner at PwC. “That’s increasing the amount of inventory that is available and is forcing marketers to shift their dollar spend as well.”
While display advertising continues to grow, it has not surpassed search revenues, according to the “2012 Internet Advertising Revenue Full-Year Report” released today by the Interactive Advertising Bureau (IAB) and PriceWaterhouseCoopers (PwC) (full report).
“Growth rate and returns for 2012 were not driven by one-time-only big moments, like the elections and Olympics,” says Sherrill Mane, SVP of Research, Analytics and Measurement for the IAB, in a presentation about the report. “We don’t see any indication that those were the big drivers this year.”
Overall display revenues jumped 9% to $12 billion in 2012, making up 33% of all online advertising. Meanwhile, search revenues continued to make up about half (46%) of all online ad revenues, with $16.9 billion in 2012. That’s a 14.5% increase over 2011, indicating search is growing faster than display.
Performance-based pricing models are still the most popular, while the hybrid model has decreased, with only 2.1% of revenues priced with a hybrid model, down from 4.2% in 2011. Impression-based models, CPMs, rose to 32% of revenues priced, up from 31.3% in 2011. Performance-based metrics also rose to 65.9% of revenues priced, up from 64.6% in 2011.
RTB continues to gain traction across channels, says Linda Gridley, President and CEO of Gridley & Company, in her forward-looking segment of the presentation, as the technology and transparency will help advertisers become more efficient in their buying. Gridley highlights data from eMarketer and Forrester Research and SpotXchange regarding that aspect of online advertising.
