Digital Advertising Spending: IAB Online Marketing Statistics

Digital Advertising Spending: IAB Reports Internet Marketing Statistics

June 10, 2014

Digital Advertising Spending analytics tool

Digital Ad Spending: IAB Online Marketing Statistics

Digital ad spending has increased significantly over the past decade. For the first time in U.S. history,marketers are spending more on online advertising than on broadcast television advertising…with the metrics to prove this digital ad effectiveness!

According to the IAB Internet Advertising Revenue Report unveiled April 10, 2014,U.S. interactive advertising revenues for 2013 hit an all-time high of $42.8 billion, exceeding broadcast television advertising revenues ($40.1 billion), for the first time ever. This figure represents an increase of 17% from 2012’s landmark revenues of $36.6 billion.

And the metrics and results for digital ads are far more quantifiable, proving their value…

For marketers, the shift to digital has significantly altered the landscape. In today’s online world, media planning, buying, communicating, evaluating and optimizing happens at a much more frequent pace, with an ever-increasing volume of campaign data, actionable advertising, results, and media ROI insights. Metrics deliver the ability to optimize digital media buying in real time for optimized results and a faster time to value.Now, marketers need to understand a wide variety of channels as they contribute to overall campaign success: to track and analyze integrated performance to allocate budgets according to ROI.

Thisfull-year Interactive Advertising Bureau reportalso reveals that Q4 revenues for 2013 came in at $12.1 billion, an increase of 17% from the $10.3 billion brought in Q4 2012. In addition, this total represents an uptick of 14% from Q3 2013 revenues at $10.6 billion.

Other highlights:

  • Digital video, a component of display-related advertising, brought in $2.8 billion in full year 2013, up 19% over revenues of $2.3 billion in 2012. Now the fourth largest format.
  • Search revenues totaled $18.4 billion in 2013, up 9% from 2012($16.9 billion).
  • Display-related advertising revenues in 2013 totaled $12.8 billion or 30% of the year’s revenues, a rise of 7% over $12 billion in 2012.
  • For the third year in a row, mobile achieved triple-digit growth year-over-year, rising to $7.1 billion during full year 2013, a 110% boost from the prior year total of $3.4 billion. Mobile accounted for 17% of 2013 revenues, whereas it was 9% of revenues in 2012.
  • Retail advertisers continue to represent the largest category of internet ad spending, responsible for 21% in 2013, followed by financial services and closely trailed by automotive which account for 13 and 12% of the year’s revenues respectively.

Results from full-year 2013 in comparison with 2012 numbers:

Full Year
2012

Full Year
2013

%

$

%

$

Revenue (Ad Formats)

Search

46%

$16,916

43%

$18,365

Classifieds and Directories

7%

$2,430

6%

$2,597

Lead Generation

5%

$1,689

4%

$1,749

E-mail

0%

$156

0%

$165

Mobile

9%

$3,370

17%

$7,084

Display-related

    – Digital Video Commercials

6%

$2,330

7%

$2,784

    – Ad banners / display ads

21%

$7,721

19%

$7,943

    – Sponsorships

2%

$845

2%

$766

    – Rich media

3%

$1,113

3%

$1,328

        Total display-related

33%

$12,009

30%

$12,821

Revenue (Pricing Models)

Impression-based

32%

$11,709

33%

$14,297

Performance-based

66%

$24,093

65%

$27,788

Hybrid

2%

$768

2%

$696

Historically, marketers have used techniques like marketing mix modeling and optimization (MMM and MMO) to understand the relationship between marketing spend and results. Unfortunately, these techniques provide a single, snapshot-in-time analysis of marketing performance using campaign information, sales revenue, econometrics, etc., but without real-time data, insights, or optimization recommendations at a granular level.

With the increasing number of online channels available to connect with consumers and businesses, marketers need to understand digital media activity on a real-time basis, so they can optimize across all channels and leverage media. Fortunately, advancements in digital analytics metrics technology (such as in TapAnalytics) now enable marketers to track and analyze campaign performance in an integrated fashion, and at a much quicker rate. Marketers can identify the influences and synergies between online channels and tactics, and how a change made to one or more of the tactics will impact performance.

Importantly, the insights and recommendations provided by measurement techniques go beyond the channel level, drilling down to granular levels of data, such as placement, creative, size, keywords, etc. These real-time insights and recommendations support marketers in planning, executing, measuring and optimizing.

“Digital marketing generates large reach and many possibilities to create impact across consumers’ purchase consideration processes, both critically important to advertisers as they seek marketing investments that have value.” said Sherrill Mane, Senior Vice President, Research, Analytics, and Measurement, IAB.

IAB (www.iab.net) sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC.

The full report is available at: iab.net/AdRevenueReport.

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