- The report, commissioned by the Interactive Advertising Bureau and conducted by PwC, says digital ad revenue in 2018 was 21.8% higher than full-year 2017 revenue of $88.3 billion.
- The growth in digital comes as advertisers continue to seek the massive audiences and targeting of tech giants like Google and Facebook.
- But the prospect of regulation may introduce hurdles for that growth.
Digital ad revenue just keeps on growing.
A new report says internet advertising revenues in the U.S. totaled $107.5 billion for full-year 2018 — the first time that figure has topped $100 billion.
The report, commissioned by the Interactive Advertising Bureau (IAB) and conducted by PwC, said revenue in 2018 was 21.8% higher than full-year 2017 revenue of $88.3 billion. That double-digit growth in internet advertising comes as TV advertising increased 1.4% and radio grew 1% from 2017 to 2018, according to the report. Meanwhile, newspaper advertising decreased 6.9% and magazine advertising fell 2.1% in 2018 year over year.
The momentum in digital comes as advertisers continue to seek the massive audiences and targeting of tech giants like Google and Facebook. But the prospect of regulation may introduce hurdles for that growth. Meanwhile, social media ad growth is slowing, which could be why companies like Facebook are exploring new ways to make money, like shopping ads on Instagram.
The IAB report said 75% of internet advertising revenues in Q4 2018 were concentrated with the top 10 ad-selling companies, but the report doesn’t break out those companies. As of February, Google was expected to hold 37.2% of net digital ad revenue share in the U.S. and Facebook was expected to hold 22.1% by the end of 2019, according to eMarketer. The organization said in March that Amazon, Facebook and Google are expected to take in nearly 70% of digital spending in the U.S. by 2021.
The IAB report said mobile and video are leading digital marketing’s growth, with mobile reaching $69.9 billion, up 40% from the previous year. Ad revenue from digital video increased from $11.9 billion in 2017 to $16.3 billion in 2018.
Social growth slowdown
Social media advertising revenue grew 30.6% in 2018 to $28.9 billion, but the report notes that expansion has been slowing and is “well below” the 46.6% compound annual growth rate of social from 2012 to 2018.
PwC U.S. partner David Silverman said social’s slowing growth may have to do with the “law of large numbers.”
“The total number of dollars flowing into social has gotten to be relatively significant at 27% of the overall pie, up from 8% [in 2012],” he said. “A lot of the growth in the industry has been driven by social media.”