The Interactive Advertising Bureau reported Internet ad revenue was close to $16 billion for the first quarter.
The Interactive Advertising Bureau (IAB) recently announced that U.S. Internet ad revenue for the fourth quarter of 2017 was close to $15.9 billion, a new high for the industry, up from $13.2 billion in the same quarter a year ago. The increase represents a 21 percent jump year-over-year, the biggest in 4 years.
“These landmark revenues confirm the growing importance of interactive for brand marketers to reach consumers who are increasingly spending their time on digital screens,” said David Doty, Executive Vice President and CMO, IAB. “Last year the industry reached its highest level of investment at over $50 billion, and this first quarter lays the foundation for what could very well be the biggest year yet for digital ad spending.”
While the IAB report doesn’t break down ad revenue by channel, the most recent Advertising Agency Survey by STRATA, a Comcast Platform Services company, provides some insight into where digital ad dollars are being spent. The survey found that Facebook and Youtube have maintained their top positions, with 96 percent and 67 percent of agencies planning to advertise on those sites.
In general, the survey found that social spend is gaining popularity, with 17 percent of agencies saying they will allocate as much as a quarter of their budgets on social, a 76 percent jump from last quarter. Social media took the top spot for digital spend at 77 percent of agencies, a 28 percent increase from previous quarter. This is the first time it has overtaken display, which was the top destination for 73 percent of agencies last quarter.
PwC also recently released its 2017-2020 Global Entertainment and Media Outlook, which predicts that in 2018, Internet ad revenue will reach $73.5 billion and overtake broadcast TV advertising in the U.S. for the first time. The outlook also projects that mobile advertising will make up 49.4 percent of Internet ad revenue by 2020.
“Digital publishers keep on getting better at providing more advertising opportunities to ad buyers. Within digital, the fastest growth we’re seeing is in social media. In particular, it’s interesting to chart Instagram’s growth in agency interest. It’s no surprise that the social media ad space is getting more competitive as advertisers are given more options,” said J.D. Miller, director at STRATA. “However, along with social’s rise, video – both local and streaming – continues to dominate. Overall, agencies are getting a better handle on their media mix and are creating exciting campaigns with these various tools.”
The STRATA survey also found that programmatic exchanges are gaining popularity as the marketplace for digital spend. According to the study, thirty-seven percent of agencies use programmatic to execute digital orders, a 22 percent increase from last quarter.
The growth in programmatic ad buying is not without risks. A recent report from the WFA says ad fraud is “second only to the drug trade” as a source of income for organized crime and could cost the industry as much as $50 billion a year by 2025. Internet use by consumers continues to grow, and ad dollars continue to follow, as do fraudsters. The key for brands is to find ways to create real connections with their customers, across mediums.