IAB: Internet Ad Revenues Surged in First Half of 2013

The first half of 2013 saw internet ad revenues reach a record high, thanks to search, display-related and mobile advertising.

Revenues in the first six months of this year totaled $20.1 billion, an 18 percent increase from the same period last year, according to the IAB Internet Advertising Revenue Report. Applying previous seasonal data, 2013 annual revenue is expected to surpass the historical peak of $36.6 billion reported in 2012.

 

Breaking down ad revenue channels, search, display-related and mobile advertising take the lead. At $4.4 billion, search-related ad revenue contributed 43 percent to overall revenues in Q2 2013, up 6 percent from the same period last year. Display-related advertising (banner ads, rich media and digital video and sponsorship) represented 30 percent of total revenues, compared to 21 percent in 2012. Meanwhile, mobile revenues increased by 149 percent and surged to $1.6 billion in Q2 2013.

“Search has historically played a significant role in online advertising and continues to do so,” says Sherrill Mane, senior vice president of Research, Analytics & Measurement, IAB. “Search was the first advertising format unique to digital media and changed the landscape of direct response advertising forever.”

A deeper look at these three most lucrative ad formats reveals that mobile revenues soared in the first half of 2013, equal to 90 percent of 2012 total mobile revenue. While search remains the leading format with more than double the share to display-related advertising, its overall share has declined. By contrast, mobile ad revenues are expected to keep their upward trend as Google, Facebook and Twitter are expanding their mobile ad spend.

“Mobile ad revenues are increasing because marketers see the value in moving budgets to mobile,” Mane tells ClickZ. “Mobile has the ability to be with the consumer at unique moments in the purchase cycle and to be a brand building vehicle. Mobile has a strong search component in it, and mobile search is part of what we report.”

Budget shift aside, this most recent internet ad revenue report provides other insights including:

• All formats other than Digital Video are down slightly as a percentage of total revenue, due to the substantial growth of mobile.
• Retail advertisers are still the largest category of internet ad spending.
• Nearly 65 percent of revenues were priced on a performance basis.

The report was conducted by PricewaterhouseCoopers (PwC) and was released by IAB. Get a full version of this report from IAB.