US digital adspend reaches £24bn in 2012

16/04/2013
Internet ad revenues again hit record-breaking double-digit annual growth, reaching nearly $37 billion (£24 billion), a 15% increase on 2011’s landmark figures.

Q4 2012 surpasses $10 billion (£6.5 billion), marking a nearly 15% increase on Q4 2011.

Mobile ad revenues more than double for the second year in a row.

US digital advertising revenues climbed to a milestone high of $36.6 billion (£24 billion) in 2012, according to the IAB Internet Advertising Revenue Report for the full-year of 2012. That historic number marks a 15 per cent rise over 2011’s full-year number, which itself had been the highest on record, at $31.7 billion (£20.7 billion).

The report, released by the Interactive Advertising Bureau (IAB) US and prepared by PwC US, additionally reveals that 2012’s fourth quarter numbers, at $10.3 billion (£6.5 billion), rose by 14.9 per cent from $9 billion (£5.9 billion) in the final quarter of 2011. These 2012 Q4 figures represent a rise of 11.6 per cent over Q3 2012, which came in at $9.2 billion (£6 billion).

Other highlights include:

For the second year in a row, mobile achieved triple-digit growth year-on-year. The past year saw the mobile category surge 111 per cent to $3.4 billion (£2.2 billion), pivoting off of 2011’s record-breaking 149 per cent year-on-year rise to $1.6 billion (£1 billion). Mobile accounted for 9 per cent of total internet ad revenue in 2012.

  • Digital video, a component of display-related advertising, brought in $2.3 billion (£1.5 billion), marking a significant year-on-year increase of 29 per cent in 2012, compared to $1.8 billion (£1.2 billion) in 2011.
  • Search revenues in 2012 totalled $16.9 billion (£11 billion) or 46 per cent of 2012 revenues, up 14.5 per cent from $14.8 billion (£9.7 billion) in 2011.
  • Display-related advertising revenues in 2012 totalled $12 billion (£7.8 billion) or 33 per cent of 2012 revenues, up almost 9 per cent from $11 billion (£7.2 billion) in 2011.
  • Retail advertisers continue to represent the largest category of internet ad spending, accounting for 20 per cent in 2012, followed by financial services, which is responsible for 13 per cent of the year’s revenues.

Randall Rothenberg, President and CEO at the IAB US comments: “These record-breaking numbers represent a paradigm shift when it comes to marketers recognizing the role a multiplicity of screens plays in effectively reaching today’s consumers.

“Mobile, in particular, soared due to its ubiquity and intrinsic ability to serve as a powerful digital dashboard that travels with you from morning commute to night time video viewing and beyond. The significant increase in digital video also underscores the importance of the upcoming Digital Content NewFronts and the vitality that sight, sound and motion play for both consumers and advertisers in the digital era.”

David Silverman, Partner at PwC US comments: “As Smartphones get smarter, cellular networks get faster and user penetration of smart mobile devices increases, the combination of personalisation and location will have tremendous appeal to marketers. We are just at the tip of the iceberg.”

Sherrill Mane, Senior Vice President, Research, Analytics and Measurement at the IAB US adds: “For the third consecutive year, digital media ad revenue has racked up double-digit growth, demonstrating the strength of interactive advertising and marketers’ commitment to be where consumers are”.

Here are the results from the full year in comparison with last year’s numbers:

Revenue (Ad Formats)

 

Revenue (Pricing models)

IAB US sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertisements 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.

A copy of the full report is available at: www.iab.net/AdRevenueReport