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Interactive ad revenues in the US surpass broadcast television for the first time: Study

MUMBAI: US interactive ad revenues for 2013 hit an all-time high of $42.8 billion, exceeding broadcast television ad revenues ($40.1 billion) for the first time ever.

This figure marks an increase of 17 per cent from 2012’s landmark revenues of $36.6 billion, according to the IAB Internet Advertising Revenue Report for the full-year.

The report, unveiled by the Interactive Advertising Bureau (IAB) and prepared by PwC US, also reveals that fourth quarter revenues for 2013 came in at $12.1 billion, an increase of 17 per cent from the $10.3 billion brought in during the same quarter in 2012. In addition, this total represents an uptick of 14 per cent from 2013’s third quarter revenues at $10.6 billion.

Other highlights include:

  • 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 percent boost from the prior year total of $3.4 billion. Mobile accounted for 17 percent of 2013 revenues, whereas it was nine per cent of revenues in 2012.
  • Digital video, a component of display-related advertising, brought in $2.8 billion in full year 2013, up 19 per cent over revenues of $2.3 billion in 2012. As a result, it also increased its share to become the fourth largest format, directly behind mobile.
  • Search revenues totaled $18.4 billion in 2013, up 9 percent from 2012, when search totaled $16.9 billion.
  • Display-related advertising revenues in 2013 totaled $12.8 billion or 30 percent of the year’s revenues, a rise of seven per cent over $12 billion in 2012.
  • Retail advertisers continue to represent the largest category of internet ad spending, responsible for 21 per cent in 2013, followed by financial services and closely trailed by automotive which account for 13 and 12 per cent of the year’s revenues respectively.
  • IAB president, CEO Randall Rothenberg said, “The news that interactive has outperformed broadcast television should come as no surprise. It speaks to the power that digital screens have in reaching and engaging audiences. In that same vein, the staggering growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers’ lives throughout the day, as well as their critical importance to cross-screen experiences.”

PwC US partner David Silverman said, “Our survey confirms that we are fully in transition to the post-desktop era. Triple digit advertising revenue growth from mobile devices contrasted the more tepid eight per cent growth from traditional computer screens. This is simply a reflection of the change in how and where consumers are viewing their information—on the go!”

IAB senior VP Research, Analytics, and Measurement Sherrill Mane said, “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 ”.

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

Full Year
2012

Full Year
2013

%

$

%

$

Revenue (Ad Formats)
Search

46 per cent

$16,916

43 per cent

$18,365

Classifieds and Directories

Seven per cent

$2,430

Six per cent

$2,597

Lead Generation

Five per cent

$1,689

Four per cent

$1,749

E-mail

0 per cent

$156

0 per cent

$165

Mobile

Nine per cent

$3,370

17 per cent

$7,084

Display-related
    – Digital Video Commercials

Six per cent

$2,330

Seven per cent

$2,784

    – Ad banners / display ads

21 per cent

$7,721

19 per cent

$7,943

    – Sponsorships

2 per cent

$845

2 per cent

$766

    – Rich media

3 per cent

$1,113

3 per cent

$1,328

        Total display-related

33 per cent

$12,009

30 per cent

$12,821

Revenue (Pricing Models)
Impression-based

32 per cent

$11,709

33 per cent

$14,297

Performance-based

66 per cent

$24,093

65 per cent

$27,788

Hybrid

2 per cent

$768

2 per cent

$696