iab:-first-half-2019-online-ad-spending-reaches-$58-billion,-but-growth-is-slowing

U.S. online ad spending reached $57.9 billion, representing growth of 16.9% year-over-year, in the first half of 2019, the IAB reported Monday.

However, that was lower than the 23.1% growth reported a year ago. The IAB also pointed out that for the first time “first half revenues were less than previoussecond half revenues.” Full year 2018 digital ad revenue was $107.5 billion. Accordingly, online ad spending should reach or just exceed $120 billion based on past spending patterns.

Desktop ad share declining. Mobile ad revenues were $39.9 billion or 69% of the total. Mobile grew 29.1% compared with 2018 ($30.9 billion). Desktop revenues were $18 billion or 31% of the total. The majority of digital ad revenue (76%) was concentrated in the “top 10 ad-selling companies.”

Distribution by format. The distribution of ad revenues by format was mostly unchanged from 2018, with a few slight shifts. Paid search represented 45% of first-half revenues ($26.5 billion), which was down a point from 2018 but up significantly in real-dollar terms.

Display was also down a point but grew to $17.9 billion from $15.8 billion a year ago. Video grew to $9.3 billion from $6.9 billion in the first half of 2018.

Separately, the IAB said that social media revenue was up nearly 26% to $16.5 billion. Social includes formats such as display and video — and now paid search. (The IAB defines social media as any ad format delivered via a social platform, including gaming.)

Audio advertising, included in “other,” grew 30% to $1.2 billion. The IAB attributes this largely to “the emergence of smart speakers.” It may, however, have more to do with the popularity of podcasts than particular distribution channels.

The bulk of digital ad spending (62.1%) was allocated to performance-based pricing, although impression based ad spending grew to 35.7% from 34.5% in 2018.

Why we should care. Mobile advertising is driving the majority of digital ad spending, and the IAB report also shows there’s growth in most format categories. Yet growth is slowing.

Many advertisers have become more vocal about the cost of paid search and paid social. And while that didn’t stop these categories from posting strong revenue gains, the days of big double-digit increases are probably over.



About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes about the connections between digital and offline commerce. He previously held leadership roles at LSA, The Kelsey Group and TechTV. Follow him Twitter or find him on LinkedIn.



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