Mobile Drives Nearly 2/3s of Digital Ad Spending
If the first half of the year is any indication, digital ad spending shows few signs of slowing down. The IAB reports that digital ad spending amounted to $49.5 billion between January 1 and June 30, 2018. The figure represents a huge increase, 23%, over the $40.3 billion spent during the same time period last year. The IAB released these figures in its Digital Trends 2018: Consumer Usage and Ad Revenue report.
The breakout by media format for the first six months of 2018 for all ad spending looks like this: (The percentages show the spending change from the same period during 2017.)
- Digital $49.5 (billion) +23%
- Broadcast TV $26.6 +5%
- Cable TV $14.6 +16%
- Magazines $5.2 -15%
- Newspaper $3.6 -8%
- Radio $2.7 -3%
There was some good news for traditional media, with Nielsen analysts pointing out that spending had grown 3% this year. But digital ad spending is still on a tear.
When we drill down into the numbers, we see that paid search scores at least 46% of digital marketing spending. Banner ad spending totaled $15.7 billion, or 32%, of the digital. Smaller percentages of 14% and 2% went to video and audio, respectively.
While digital is turning in an impressive performance, mobile formats are true growth stars. Between 2017 and 2018, digital revenue from mobile search grew from 52% to 59 percent. Similarly, 74% of banner ad revenue comes from mobile and 60% of video ad revenue comes from mobile. This shift is impressive considering that advertisers were wary of the power of mobile’s influence just a few years ago.
Advertiser willingness to pay for mobile ads is likely linked to screen time. Smartphones and tablets capture 71% of consumers’ digital screen time as opposed to 29% on desktops. Not surprisingly, 63% of digital ad spending goes to mobile screens, while 37% goes to desktop.
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