Digital ad revenue surpasses TV for the first time, says IAB

IAB: Digital ad revenue surpasses TV for the first time

Step aside, television — the internet has taken over.

The Internet Advertising Bureau (IAB) has tracked digital ad spend since 2004, and for the first time ever, digital spend has surpassed that of TV ad spend in the United States. In their semi-annual report released on Thursday, the IAB reported full year internet advertising revenues of $72.5 billion, compared to traditional TV’s $71.3 billion, as reported by eMarketer.

Digital ad revenue is up 21.8% from 2015, and mobile played a big role in that increase. Mobile is now responsible for 36.6% of total digital ad revenues.

IAB/PwC Internet Ad Revenue Report, FY 2016
($ billions). Source: IAB/PwC Internet Ad Revenue Report, FY 2016

The report’s quarterly growth trends chart also confirms that revenues are on the rise, with continued seasonal bumps in Q4 and dips in Q1 of each year. These can be attributed to increases in ad spend during the holiday season, and then lulls as marketing managers take time to re-adjust their strategy for the new year.

IAB/PwC Internet Ad Revenue Report, FY 2016
Source: IAB/PwC Internet Ad Revenue Report, FY 2016

Digital Video Revenue

Digital video revenue saw an especially prominent increase, rising 53% to $9.1 billion in 2016, versus 2015’s $5.9 billion. Mobile was a huge driving force in digital video, rising 145% from 2015.

IAB/PwC Internet Ad Revenue Report, FY 2016
Source: IAB/PwC Internet Ad Revenue Report, FY 2016

“Mobile fueled the internet economy in 2016,” said Randall Rothenberg, President and CEO of the IAB. “This increasing commitment is a reflection of brands’ ongoing marketing shift from ‘mobilefirst’ to ‘mobile-only’ in order to keep pace with today’s on-the-go consumers.”

Social media advertising revenue also saw a substantial jump, totaling $16.3 billion in 2016, up 49% from the previous year.

You can read the IAB’s full 2016 internet advertising revenue report, prepared by PricewaterhouseCoopers, here.