IAB: Digital Advertising Revenue Surged in 2020, Despite Global Catastrophe

The Internet Advertising Bureau (IAB) released its 2020 “Internet Advertising Revenue Report,” conducted by PwC, late last week. The report found that, while internet ad revenues took a hit during the onset of the COVID-19 pandemic in the second quarter (Q2) of last year, subsequent quarters more than made up for the momentary revenue decline. Overall, digital advertising revenues increased 12.2% year-over-year (YoY).

“The second half of 2020 made up for the rather abrupt drop in advertising revenue experienced toward the end of the second quarter,” said IAB Senior Vice President, Research and Analytics, Susan Hogan in an April 7 news release. “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.”

Those factors contributed to a record-setting Q4 for the digital advertising industry. Revenues grew 28.7% compared to the previous year, the highest increase in at least 20 years. Q3 also saw sterling 11.7% growth; revenues declined by 5.2% in Q2.

Social media advertising revenue grew 16.3% YoY, to $41.5 billion. This category now accounts for nearly 27% of all digital advertising revenue.

Digital video advertising revenue grew 20.6%, more than any other category, to $26.2 billion. Nearly 19% of all digital advertising revenue now comes from video advertising.

Programmatic ad revenue also increased significantly YoY, to more than $14 billion. This is one category for which future increases may be in jeopardy, however. Per Hogan, “there is some concern that programmatic delivery could be negatively impacted once 3rd party tracking is blocked.”

The COVID-19 pandemic has reset the global economy, accelerating existing trends towards digital commerce. The fact that digital ad revenues grew even while the world recoiled from an unprecedented catastrophe suggests that the industry is set up to thrive in coming years.


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