Digital Ad Spend Hits Record-Breaking $49.5B

U.S. digital advertising revenues for the first six months of 2018 soared to $49.5 billion—the most advertisers have ever spent on digital media in a first half of a year—according to the latest IAB Internet Advertising Revenue Report released by the Interactive Advertising Bureau ( IAB ) and produced by PwC US.

This represents a dramatic 23 percent year-over-year increase from the $40.3 billion reported for the same period in 2017.

Report analysis attributes the growth, in part, to the rise of the direct brand economy and the related increase in mCommerce. No longer satisfied shopping solely in brick and mortar stores, consumers are embracing new digital-first, direct-to-consumer (DTC) brands or product lines that often do not appear in-store at all, driving advertisers and retailers to reach new customers via mobile.

Other highlights from the report include:

• Digital video advertising revenue reached $7 billion in the first half of the year, up 35% from a year ago, with 60% of this revenue attributed to mobile video
• Digital audio advertising grew 31% to reach $935 million in revenue in the first half of 2018, on track to exceed last year's full-year revenue of $1.8 billion
• Mobile, which now accounts for nearly two-thirds (63%) of all digital ad revenue, continues to be the internet's leading ad platform up from 54% of total revenues in half-year 2017
• Advertisers spent $30.9 billion on mobile media in the first half of 2018, up 42% from $21.8 billion over the same period last year
• Mobile search advertising also grew considerably to $13.5 billion, with an increase of 37% in the first half, while desktop search was flat at $9.3 billion
• Mobile search now accounts for 59% of total search revenue
• Mobile display ad revenue grew 45% to $11.7 billion in the first half of the year, accounting for 74% of all display ad revenue
• Social media revenue was $13.1 billion in the first half, up 38% year-over-year

“This landmark figure cements digital advertising—whether display, search or mobile video—as one of the most powerful mechanisms of all time for brands to build relationships with consumers,” said Randall Rothenberg, CEO, IAB. “It’s a truth upon which direct-to-consumer brands have built their businesses, and from which all businesses can benefit.”

“There is no question that digital advertising is top-of-mind with brand marketers,” said Anna Bager, Executive Vice President of Industry Initiatives, IAB. “Video is front and center, experiencing a surge—especially on mobile devices. Other formats, like digital audio and social media are seeing spikes and are ripe for further growth.”

“Half-year digital advertising spend in 2018 outpaced the last few years,” said Sue Hogan, Senior Vice President, Research and Measurement, IAB. “Typically, first half revenue trends lower than second half. That we’ve see 23 percent growth this year from January through June, while simultaneously witnessing the continued decline in ad spend on traditional media, indicates that the industry dollars—which were slow to follow actual consumer behavior—are now aligning appropriately.”

“Over the course of the last 23 years, this report has served as the official tracking mechanism of the size of the digital advertising industry and the trends propelling its ongoing rise,” said David Silverman, Partner, PwC US. “This 2018 half year report continues to drive awareness of the great influence of this industry, and specifically the great transformation that has occurred in the advertising ecosystem.”