Mobile Now Accounts for Half of US Video Ad Spend

IABMobile video revenue has caught up with desktop video revenue for the first time in the US, according to the Interactive Advertising Bureau’s (IAB) revenue report for H1 2017. IAB finds mobile advertising is powering the overall growth of digital ad revenues, which grew 22.6 percent to $40.1 billion compared to H1 2016. But while mobile’s impact on digital ad revenues powers continued impressive growth, other forms of media are still struggling: despite the strong growth of digital, Nielsen finds total media revenues decreased by two percent across all platforms.

The IAB report, based on surveys conducted independently by PricewaterhouseCoopers, polls American industry players for specific measures of ad revenue where possible, and estimates revenues for non-participating countries to try to give a measure of the total value of US digital advertising.

The findings show video advertising maintaining strong growth. Video ad revenues reached $5.2 billion in H1 this year, a 37 percent increase from the same time last year. The bulk of this growth is down to mobile: mobile video revenues grew from $1.6 billion to $2.6 billion, while desktop video revenues grew from $2.3 billion to $2.6 billion.

The report also marks the first time that mobile has accounted for more than half (54 percent) of digital ad revenue across all formats. Mobile’s trajectory is strong, with revenue for the first half of 2017 alone higher than mobile revenue for the whole of 2015. Mobile video spend has now caught up with desktop, but video is the slowest format to see spending shift to mobile. Seventy-four percent of audio, 65 percent of banner and 52 percent of search spend is now funnelled into mobile.

David Silverman, partner at PwC, believes these figures show that the industry should stop differentiating so much between screens. “We should no longer think of the internet as mobile vs desktop,” he said. “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.”

IAB’s report also finds, unsurprisingly, that the tech giants continuing to dominate ad spend, with the top ten ad-selling companies commanding 75 percent of revenues.This figure has fluctuated between 69 percent and 75 percent over the past ten years.

But while large companies continue to take the majority of sales, IAB believes small and medium businesses are increasingly important spenders. In an accompanying webinar, it was noted that growth among large national advertisers has been too slow to account for the digital advertising’s consistently strong performance. IAB claims that better understanding these businesses will be crucial for the digital ad ecosystem to tap into the opportunity these businesses represent.

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