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Digital Ad Spend Increases 23% Year-Over-Year in First Half of 2017, Hitting Record-Breaking High of $40.1 Billion, According to IAB Internet Advertising Revenue Report

IAB Analysis Points to Significant Advertising Investments from Small & Medium-Sized Businesses Fueling the Growth of the Digital Marketplace

NEW YORK, NY (December 20, 2017) —The Interactive Advertising Bureau (IAB) announced today that digital advertising revenues in the United States for the first half of 2017 surged to an all-time high of $40.1 billion, according to the latest IAB Internet Advertising Revenue Report released by the industry trade group and prepared by PwC US. This represents a 23 percent year-over-year rise from the $32.7 billion reported during the same timeframe in 2016.

Mobile captured 54 percent of total digital ad revenues—maintaining its status as the web’s leading ad format. Advertisers spent $21.7 billion on mobile during the first six months of 2017, a 40 percent increase from $15.5 billion in half-year 2016 and far surpassing the $8.2 billion reported just two years ago in HY 2015.

In an addendum to the report, IAB analysis shows that of the roughly 9 million small and medium-sized businesses in the U.S., 75 percent or more have spent money on advertising. Of these, 80 percent have used self-service platforms and 15 percent have leveraged programmatic advertising. These findings point to significant ad spend going to publishers with these capabilities, and presents a growth opportunity for those that can add self-service and programmatic geared to these businesses into the mix.

Other highlights from the report include:

  • Total digital video, including mobile and desktop, rose to $5.2 billion in HY 2017, up 36% from $3.8 billion in HY 2016
  • Video on mobile overtook video on display for the first time, with mobile video reaching $2.6 billion in HY 2017, compared with display video, which was just shy of that same figure
  • Total social media advertising, including mobile and desktop, brought in revenues of $ $9.5 billion in HY 2017, a 37% upswing over $7 billion in HY 2016
  • Total digital audio advertising, including mobile and desktop, generated $603 million in HY 2017, a 42% increase over HY 2016’s revenue of $425 million

“Being nimble and accessible are hallmarks of the new digital economy,” said Randall Rothenberg, CEO, IAB. “Now, anyone with a good idea and a credit card can capture the attention of their customers directly, and this in turn represents an enormous growth opportunity for both marketers and publishers alike to help make these connections.”

“We’ve seen digital marketing revenues climb steadily and this new analysis shows that there are more opportunities to be mined,” said Chris Kuist, Senior Vice President, Research and Impact, IAB. “Varied audiences and advertising approaches can appeal to a wide variety of marketers in different shapes and sizes, bringing more dollars into the ecosystem and increasing the health of the interactive marketplace for all.”

“We should no longer think of the internet as mobile versus desktop,” said David Silverman, Partner, PwC US. “Advertisers are simply following consumers, who live their lives online—whether on a smartphone during a commute, on a desktop at work, or on a tablet for entertainment in the evening. Digital is an intrinsic part of every American’s day.”

Historical Half-Year Revenue Growth (in millions)

Year Revenue % Growth
HY 17 $40,38 22%
HY 16 $32,739 19%
HY 15 $27,481 19%
HY 14 $23,091 15%
HY 13 $20,066 18%
HY 12 $17,028 14%
HY 11 $14,941 23%
HY 10 $12,127 11%
HY 09 $10,900 -5%
HY 08 $11,510 15%
HY 07 $9,993 26%
HY 06 $7,909 37%
HY 05 $5,787 26%
HY 04 $4,599 40%
HY 03 $3,292 11%
HY 02 $2,978 -20%
HY 01 $3,720 -7%
HY 00 $4,013 147%
HY 99 $1,627 110%
HY 98 $774 125%
HY 97 $344 320%
HY 96 $82


Comparison of Half-Year Revenue Growth (in millions)

Desktop and Mobile Half Year
2017
Half Year
2016
% $ % $
Search 33.4% $19,134 49.4% $16,160
Banner 30.8% $12,361 30.1% $9,862
      Sponsorships 1.0% $387 0.9% $301
      Rich Media 2.8% $1,129 2.7% $875
      Ad banners / display ads 27.0% $10,844 26.5% $8,686
Digital Video Commercials 13.o% $5,202 11.7% $3,832
Other 8.6% $3,438 8.8% $2,883
      Classifieds and Directories 3.8% $1,524 3.8% $1,248
      Lead Generation 3.2% $1,268 3.6% $1,184$
      Audio 1.5% $603 1.3% $425
      Other 0.1% $42 0.1% $25
Total 100% $40,138 100% $32,739

Comparison of Revenue Models (in millions)

Format Half Year
2017
Half Year
2016
% $ % $
Impression-based 33.4% $13,404 33.9% $11,112
Performance-based 64.9% $26,042 64.6% $21,158
Hybrid 1.7% $691 1.4% $469
Total 100% $40,138 100% $32,739

IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The results are considered a reasonable measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertising on the internet. The survey includes data concerning online advertising revenues from web sites, commercial online services, free email providers, and all other companies selling online advertising.

The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first and third quarters. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. Past reports are available at www.iab.com/adrevenuereport.

About PwC US

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2017 PwC. All rights reserved

About IAB
The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, it develops technical standards and best practices. IAB and the IAB Education Foundation are committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., IAB advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, the IAB is headquartered in New York City and has a San Francisco office.

IAB Media Contact 
Laura Goldberg
347.683.1859
[email protected]

PwC Media Contact
Carey Bodenheimer
213.392.9684
[email protected]