In its Q1 2017 and 2016 Full Year reports, the Interactive Advertising Bureau (IAB) found that internet advertising is generating historic revenue. Social media and desktop video ad revenues are on the rise, and plenty of other segments are rising along with them. Mobile is making up a larger part of the internet advertising landscape than ever before and for the first time, digital audio is making up a significant portion of internet advertising, too.
The numbers make it clear that internet advertising is growing and changing shape. IAB’s reports paint a picture of an industry that’s adjusting to trends and following consumers as they spend more time on phone screens. Take a look at the top 10 statistics from the IAB reports to learn more about the shifting tides of the internet advertising industry.
IAB found that the first quarter of 2017 saw the highest Q1 revenue since 1996, when it began reporting internet advertising revenue. During Q1 2017, internet advertising brought in $19.6 billion in revenue, a 23% ($3.7 billion) increase over Q1 2016. Internet advertising is showing clear and strong growth, even as the methods by which advertisements are reaching audiences are changing.
Q1 2017 is second only to the record-setting Q4 2016 for total revenue. Q4 2016 saw $21.6 billion in revenue, which was a 24.3% ($4.2 billion) increase over the reported revenue for Q4 2015. A drop-off in revenue between Q4 and the following Q1 is expected, but the dip wasn’t large, and it managed to stay well above 2015’s Q4 high water mark.
Total internet advertising revenue for 2016 was 21.8% higher than it was in 2015 — $72.5 billion compared to 2015’s total of $59.6 billion. With few exceptions, internet advertising has enjoyed steady consistent gains year-over-year. Increases in total revenue were flat in the period between 1996-2009, but after a slight dip in 2009, internet advertising revenues have climbed, and gains have been particularly dramatic in the last three years.
In IAB’s report, the mobile category includes categories like mobile search and display-related mobile activity, and all-told, mobile generated $36.6 billion in revenue during 2016, up from $20.7 billion in 2015. It accounted for 50.52% of overall internet advertising revenue, taking the top spot for the first time in the history of the report.
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IAB’s 2016 report shows that internet advertising has, in the last several years, trended toward boosts in the fourth followed by dips during the first two quarters of the following year. Internet advertising increases during the holiday season, and since 2009, revenue has reflected a steady trend of peaks and valleys surrounding third and fourth quarters.
In 2015, desktop video generated $4.24 billion in revenue to mobile video’s $1.69 billion. In 2016, mobile video saw massive gains, bringing in $4.16 billion to desktop video’s $4.89 billion. Video on mobile is becoming more ubiquitous, and it may not be long before mobile video eclipses desktop video entirely.
Social media is a key component of the continuing growth of mobile in 2016. Users are spending a lot of time looking at screens, and a huge portion of that time is spent on social media apps. As social media continued to grow and take up a larger portion of audiences’ time, advertising on social media saw a major increase in 2016, climbing to $16.3 billion from 2015’s reported $10.9 billion.
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In the past, digital audio wasn’t a large enough segment of the market to warrant it an individual presence on the IAB internet advertising revenue reports, but 2016 changed that. Generating $1.1 billion dollars, digital audio is becoming a legitimate part of the internet advertising landscape. Streaming music services make up the bulk of revenue drivers, and mobile accounts for the vast majority of the total, bringing in $892 million to desktop’s $205 million.
Of the $72.5 billion in revenue from 2016, retail made up 21% of internet ad revenue. Second and third place were well behind, with financial services making up 13% and the auto industry constituting 12%. From 2015 to 2016, changes in top industries’ total share of the revenue were minimal. Consumer electronics and leisure travel saw small increases, but each industry saw relative stability.
If the rise of mobile advertising is the story of internet advertising revenues from 2016, it continues in stark difference between Q4 revenue in 2015 and 2016. Mobile ad revenues in Q4 2016 were 68% higher than they were in Q4 2015, and full year stats show that 2016 saw a 77% increase over 2015. Mobile seems poised to continue dramatic growth, making up an increasingly large and vital part of the internet advertising ecosystem.