IAB Report: 2018 Digital Ad Spend Set to Hit $100 Billion

IAB LogoThe boom in US consumer spending has benefited lots of companies, brands and media. But the biggest winners of all may be providers of digital marketing platforms.

The nation is on track to reach $100 billion in digital ad expenditures this year for the first time, after a new report by the Interactive Advertising Bureau pegged first-half outlays at $49.5 billion. Because of the holiday shopping season and other factors, second-half advertising revenues typically track higher than first-half expenditures.

Meanwhile, traditional advertising media continued to get socked with market share losses to digital and overall decline in outlays.

The growth in digital ad revenues during the first half of the year was 23 percent. More of those ad dollars are shifting to mobile, which accounted for 63 percent of the total compared with 54 percent during the same period last year.

“We’re really looking at that as advertisers catching up to consumer behavior,” Sue Hogan, the IAB’s senior vice president of research and measurement, told TechCrunch.

In a statement, Hogan said that the patterns indicate “industry dollars—which were slow to follow actual consumer behavior—are now aligning appropriately.”

Meanwhile, video advertising was up by 35 percent to $7 billion in the first half, with mobile video accounting for 60 percent of the total. Digital audio ad revenue was up 31 percent, and social-media revenue was up by 38 percent for the period.

For the first six months of last year, social media spending increased by 37 percent over the year earlier. Its growth surpassed 50 percent in the first halves of 2014 and 2015.

David Silverman, a partner of PricewaterhouseCoopers, which prepared the report, told TechCrunch that the growth of mobile commerce and direct-to-consumer brands are playing big roles, with new technologies giving digital advertisers “the ability to efficiently and effectively target consumers who are likely to be interested in a purchase, driving the cost of acquiring that customer down.”

“You can then plow that profit back into your business,” Silverman said. “The digital advertising market is helping to fuel that growth.”

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