IAB: Digital Advertising Hits Record High of $27.5 Billion

Mobile Leads the Pack, Accounting for 30% of All Digital Advertising Spend

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Domestic digital advertising revenue surged 19% to $27.5 billion during the first six months of 2015, a landmark high for the industry since the Interactive Advertising Bureau began tracking the information nearly two decades ago.

Second-quarter internet ad revenue also rose by 22.5% to $14.3 billion, up from $11.7 billion from the first half of last year, according to a report released Wednesday by the IAB and prepared by PwC.

Advertisers continue to invest dollars in mobile, as revenue climbed to $8.2 billion for the first half of 2015, up about 54% from $5.3 billion reported from the first half of last year. Mobile now represents 30% of all revenue generated by digital advertising.

Emerging markets such as social media also continue to show growth, as revenue delivered on the space reached $4.4 billion during the first half of 2015, a 51% increase over the same period a year ago. Social media revenue includes websites like Facebook or Twitter, as well as social gaming websites and apps, the IAB said.

Retail, financial services and automotive continue to lead in advertising spend.
Retail, financial services and automotive continue to lead in advertising spend. Credit: IAB

"We're witnessing a seismic shift in consumer behavior to the always-on, connected consumer," said David Silverman, partner, PwC. "As a result, we've seen social continue to fuel the growth of digital, particularly with respect to mobile and video."

Digital video, which is a component of display-related advertising, reached $2 billion in the first half of 2015, a 35% year-over-year increase from $1.5 billion during the same time a year ago.

Meanwhile, revenue generated from search advertising reached double digits, surpassing $10 billion, an 11% increase over the $9 billion in revenue reached during the same period in 2014.

Additionally, the same three advertising verticals continue to account for nearly half of all advertising revenue, with retail contributing the most at 22%, followed by financial services (13%) and automotive (13%).

Online advertising remains concentrated, with the 10 leading ad-selling companies accounting for 72% of total revenues in the first half of 2015, up 1% from the same time a year ago.

"Internet ad revenue growth is being driven further than ever before, as advertisers continue to invest in new ways to reach consumers," said Sherrill Mane, senior VP-research and analytics and measurement, IAB. "Audiences have rapidly altered their media and purchasing habits and made digital media and mobile devices an integral part of their lives."

The report was conducted by PwC on an ongoing basis, with results released quarterly, and was conducted independently by PwC on behlaf of the IAB.

Approximately 66% of the first-half revenue in 2015 was priced on a performance basis, up 1% from the same time a year ago, while CPMs declined to 32% from 34% in 2014.

Credit: IAB