IAB Internet Advertising Revenue Report for 2020 Shows 12.2% Increase in Digital Advertising, Despite COVID-19 Economic Impacts

NEW YORK, April 7, 2021 /PRNewswire/ -- As the world grapples with the ongoing ramifications of the COVID-19 pandemic, the digital advertising sector continues to show tremendous resilience.  In fact, according to the newly released "IAB Internet Advertising Revenue Report," conducted by PwC, digital advertising revenues increased by 12.2% in 2020 compared to 2019.

"The second half of 2020 made up for the rather abrupt drop in advertising revenue experienced toward the end of the second quarter," said Susan Hogan, Senior Vice President, Research and Analytics, IAB. "We not only had a rebound, we also had double-digit growth. The Q4 holiday season sales, typical use-it-or-lose-it year-end spending of media budgets, and revenue from political advertising all helped to offset the early Covid-19-induced decline."

Hogan continued, "The surge in consumer adoption of Connected TV, ecommerce shopping, and at-home deliveries created the pendulum swing needed for digital media to continue growing. These are just some of the factors that contributed to ad dollars moving from traditional media to digital media."

Q4 2020 Provides Optimism for the Future, Reports Record High Growth

Although Q2, year-over-year growth declined by 5.2%, revenues in Q3 and Q4 more than balanced the scales, returning positive year-over-year growth of 11.7% and 28.7%, respectively. In fact, Q4 2020 had the highest revenue on record for digital advertising in more than 20 years. The increase in Q4 can be attributed to a number of factors including both advertising dollars flooding into the market for the election and the need to spend 2020 budgets that were paused during the first half of the year because of the pandemic.

Video and Social Media Experienced the Largest Increases Year-Over-Year, Taking Share from Linear TV

Seemingly pandemic proof, social media advertising revenues reached $41.5 billion in 2020. That 16.3% year-over-year growth attributes social media with nearly 30% of all internet advertising revenue (29.6%).

Digital video experienced the greatest increase (20.6% year-over-year) in advertising revenue growth, generating $26.2 billion in 2020. Digital video increased its share of total internet ad revenue by 1.3% year-over-year, reaching 18.7%.

Programmatic Revenue Grew by Nearly 25% in 2020...But Will it Continue as the Addressable Landscape Transforms?

Programmatic advertising revenues increased by $14.2 billion in 2020 (+24.9%). However, the deprecation of 3rd party cookies and identifiers leave many to wonder if this level of growth is sustainable.

"We expected programmatic growth in double digits. Advertisers are using automated buying for more formats now, including CTV. The fact that Q2 2020 saw a shift from performance to mission-based messaging due to COVID-19 accelerated the speed of programmatic adoption for agencies and brands," said Hogan. "However, there is some concern that programmatic delivery could be negatively impacted once 3rd party tracking is blocked."

"IAB Internet Advertising Revenue Report" can be downloaded here.

Methodology

Commissioned by the IAB and conducted by PwC Advisory Services LLC ("PwC") on an ongoing basis, with results released quarterly, the "IAB Internet Advertising Revenue Report" was initiated by the Interactive Advertising Bureau (IAB) in 1996. This report uses data and information reported directly to PwC from companies selling advertising on the internet as well as publicly available corporate data. The results reported are considered to be a reasonable measurement of internet/ online/mobile advertising revenues because much of the data is compiled directly from information supplied by companies selling advertising online. The report includes data reflecting desktop and mobile online advertising revenues from websites, commercial online services, ad networks and exchanges, mobile devices, and email providers, as well as other companies selling online advertising. The report is conducted independently by PwC, including research by their in-house market research team, on behalf of the IAB. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. Only aggregate results are published and individual company information is held in strict confidence with PwC. Further details regarding scope and methodology are provided in the appendix of this report.

About IAB

The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 650 leading media companies, brands, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

SOURCE Interactive Advertising Bureau (IAB)

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