IAB: Digital Ad Revenue on Pace For $85bn in (Another) Record-Breaking Year

Digital advertising had yet another record-breaking first half of 2017, and is on pace to hit $85 billion by year's end, according to the latest figures from the Ineractive Advertising Bureau. Digital ad revenue, which is always at an all-time high, this time surged nearly 23 percent to $40 billion, up from the $31 billion reported during the same period last year, the IAB said Wednesday in a report prepared by PwC. Mobile captured 54 percent of all revenue, the highest ever, and is up from the 47 percent reported during the first half of 2016. The $85 billion estimate for the full 2017 calendar year would mark a 17 percent uptick from 2016. Although it marks eight consecutive record breaking first halfs, questions still linger about who's capturing all the growth. Here are five takeaways from this year's report. The IAB's new sales pitch In a first, the IAB spent a significant amount of time on how small- and medium-sized businesses are helping drive revenue growth for digital advertising as a whole. The trade body says ad spending growth among the largest companies is "anemic," but described small-and-medium-sized businesses as "a world that has not been previously explored." According to the IAB, 75 percent of the 9 million small- and medium-sized businesses in the U.S. now buy digital advertising, with 80 percent buying through self-serve platforms like Facebook, Twitter and Google. Fifteen percent are buying programmatically and 63 percent say they expect to increase their digital ad spend in the next year. The trade body did not provide year-over-year data to compare the figures. Cynics may point out that the IAB is trying to change the previous narrative that Facebook and Google are capturing the majority of growth in digital advertising; a new report issued today by Pivotal Research says the two tech titans combined accounted for 73 percent of all digital advertising in the U.S. during the first half of 2017, up from 70 percent during the same period last year. "We are not trying to change the subject, we are trying to understand the subject," Chris Kuist's senior VP of research and impact at the IAB, tells Ad Age. "We believe there is logical evidence that the influx of money from small and medium sized businesses is an important piece of why digital is growing at the exceptional rates it has. We need to understand that better and this is us getting smarter." Digital video Of all the ad formats on desktop, digital video is the only one showing growth. Total digital video, including both mobile and desktop, rose to $5.2 billion for the first half of 2017, up 37 percent from the $3.8 billion reported during the same period last year. In a first, however, mobile and desktop video are each generating the same amount of revenue at $2.6 billion a piece. On the duopoly The IAB says the top 10 digital advertising companies commanded 75 percent of all revenues in the second quarter of 2017, the same as last year. The trade body demured over how much growth is attributed to just Google and Facebook. "I would love to know the answer to this, but I don't have access to that kind of a breakout," Kuist tells Ad Age. "We're not trying to not know … Facebook and Google do their own quarterly statements -- they talk about their own numbers and I don't have a view into that. I wish there was a way to answer this." When asked how much revenue the top two companies generated for the first half of 2017, Kuist said, "I don't have access to that kind of a breakout." Digital radio The proliferation of advertising on mobile has greatly contributed to digital audio growth, the IAB said. The first six months of 2017 saw $603 million in audio advertising revenue, a 42 percent increase over the first half of 2016. Mobile captured $448 million while desktop saw the rest, the IAB said. This and that:

IAB: Digital Ad Revenue on Pace For $85bn in (Another) Record-Breaking Year

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