JC Lupis | Marketing Charts | Tue, 26 Apr 2016 13:00:07 +0000

Online ad spending continues its rapid growth in the US, up 20% in 2015 to reach almost $60 billion, per the latest revenue report [pdf] from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC). Among the trends arising from the report is the continued surge in mobile ad spending, which climbed to 35% of full-year online ad spending, including 40% share in Q4.IABPwC-Online-Ad-Revenues-2005-2015-Apr2016

The figures are interesting in light of recent estimates from eMarketer, which pegged mobile at a majority share of US digital ad spending as of last year. The firm also predicts that mobile will rival TV in ad spend by 2020.

In any case, mobile is now larger than any single non-mobile digital advertising category (such as search or display), per the IAB and PwC report, although mobile itself is comprised of those same formats. Its 35% share of online ad spending last year was up from 25% a year earlier, buoyed by a 66% increase in spending (to $20.7 billion).

Aside from mobile, non-mobile search revenues accounted for 34% of all digital ad spending last year ($20.5 billion), per the report, down from 38% share in 2014. Non-mobile display-related advertising comprised 23% of total revenues ($13.9 billion), down from 27%, led by banner ads (13% share; $7.7 billion) and digital video (7% share; $4.2 billion).

IABPwC-Online-Ad-Revenues-by-Format-2013-2015-Apr2016

Interestingly, as mobile advertising grows, its emphasis appears to be shifting from search to display formats. In 2014, mobile ad revenues were fairly evenly split between display-related formats (49% share of mobile ad spend) and search (48%). This past year, however, display-related formats comprised a larger 53% share of all mobile ad spending, compared to 43% for search.

IABPwC-Mobile-Ad-Revenues-by-Format-2014-2015-Apr2016

When factoring mobile into the equation, search accounted for almost half – 49% – of full-year online advertising revenues, down a point from 2014’s share. Display-related advertising – which includes banners, digital video, rich media, and sponsorship – comprised 42% of 2015’s US digital ad spending, up a couple of points from 2014.

In other results from the report:

  • US online ad spending has now grown by a compound annual rate of 17% between 2005 and 2015;
  • Q4 marks the 23rd consecutive quarter in which spending has grown by double digits year-over-year;
  • Mobile’s compound annual growth rate (CAGR) of 100% between 2010 and 2015 far outstrips the comparable rate (9%) for non-mobile spending;
  • Second-half revenues ($32.1 billion) again outpaced first-half revenues ($27.5 billion), with the former averaging 53% of the annual total over the past 10 years;
  • US online ad spending has become even more concentrated, with the top 10 ad-selling companies commanding 75% of total revenues in Q4, up from 71% in the year-earlier period;
  • Social media advertising grew by more than 50% year-over-year to reach $10.8 billion, meaning that almost one-fifth (18%) of online advertising was related to social media;
  • Retail was again the dominant industry spender on digital advertising, representing 22% share of spending (up a point from last year), and followed by financial services (13%), auto (13%), telecom (9%) and leisure travel (9%); and
  • Performance-based pricing remained the leading model at 65% of revenues (down a point from 2014), with CPM/impression-based pricing remaining at 33% of revenues.

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