Five Notes on Digital Advertising Revenues in H1

October 30, 2019

Recent estimates show that the online advertising in the US has far surpassed TV ad spending and is predicted to grow apace in the next few years. That being said, a half-year report from the IAB and PwC indicates that growth in online advertising revenues has slowed to a level not seen since the first quarter of 2015.

In the first half of 2019, revenues for online advertising hit $57.9 billion, up 16.9% y-o-y. While revenues are still growing, compared to the average of 22% of growth in the first half of the previous two years, growth in H1 2019 appears to have lost the momentum seen in previous periods.

In fact, in Q2 2019, revenues grew a relatively small 16.7% year-on-year (y-o-y) to reach $29.9 billion – the slowest growth rate observed by the IAB and PwC since Q1 2015

Here are a few other breakdowns by digital advertising channel.

Mobile’s Share Keeps Climbing

As an increasing share of consumers’ time is spent on their mobile devices, eclipsing that of time spent watching TV this year, it’s clear why mobile’s share of internet advertising revenue now stands at 69%, accounting for $20.6 billion of the $29.9 billion total internet advertising revenue for H1 2019. This is up from 62.5% share ($16.0 billion) in H1 2018.

Although desktop advertising revenues for H1 2019 dropped to $9.3 billion, a y-o-y low not seen since 2017, other data from earlier this year found that, at least within the B2B sector, advertisers were forecasted to invest more on desktop advertising than on mobile.

Digital Video Advertising Rising Quickly

Digital video accounted for 16.4% share of total internet advertising revenues in H1 2019, up for the 14.2% share it held during the year-earlier period. In reaching $9.5 billion in ad revenues for the half-year period, digital video advertising demonstrated a growth rate more than twice that of the internet ad industry as a whole (35.7% vs. 16.9%).

On desktop, video’s share of revenue grew from 15% in H1 2018 to 17% in H1 2019, eating into banner’s share, which decreased from 22% to 19%. Digital video also experienced growth on mobile, increasing from 14% share of spend in H1 2018 to 16% in H1 2019. In fact, half-year results from the past few years show that while revenues from desktop video have only risen slightly, mobile video revenues have increased considerably, including a 50%+ jump in the past year.

Social Media Ad Rev Growth Also Above-Average

Globally, social media advertising revenue growth appears to be slowing. A similar trend could be occurring in the US. After rising by almost 40% between H1 2017 and H1 2018, this latest half-year report indicates that social media ad revenues grew by a smaller 25.7% year-over-year.

Even so, social media advertising’s growth rate continues to outpace the overall digital advertising average.

Digital Audio Small But Making Strides

Digital audio advertising revenues accounted for only 2.1% of total internet advertising in H1. However, digital audio has seen impressive growth (30.1%) in the first half of the year on its way to $1.2 billion in spending. Digital audio’s growth comes amid a rise in digital radio and podcast listening as well as continued popularity of on-demand music streaming.

Once again, the majority of the growth came through mobile, with mobile audio growing 40.9% y-o-y and desktop audio ad revenues largely stagnant.

The full report can be downloaded here.

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