IAB: 2018 Final Numbers Show Digital Ad Spending Surpassed $107B

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The biggest news from the IAB’s 2018 Full Year 2018 Inter­net Adver­tis­ing Rev­enue Report is that busi­ness­es spent $107 bil­lion on dig­i­tal out­reach last year. That lev­el reflects a 21.8% growth rate over the pre­vi­ous year. Dig­i­tal now accounts for over 39% of all adver­tis­ing in the U.S. Here’s what else your clients need to know.

The Power of Mobile

While total dig­i­tal spend­ing record­ed a 16.8% com­pound annu­al growth rate, mobile adver­tis­ing was on a tear last year. With a CAGR of 53.8%, mobile adver­tis­ing amount­ed to $69.9 bil­lion or 65% of total dig­i­tal spend­ing in 2018.

Power Play By Heavy Hitters

When it comes to sell­ing dig­i­tal adver­tis­ing, your clients are up against tough com­pe­ti­tion. The top ten com­pa­nies account­ed for 75% of total spend­ing. These heavy hit­ters, think Face­book and Alpha­bet, man­aged to snag anoth­er 3% of the dig­i­tal ad pie dur­ing 2018. The top 11 to 25 com­pa­nies cap­tured 7% of total ad spend­ing and every­one else shared the remain­ing 18%.

Spending by Format

Your clients should also know how mar­keters are spend­ing their dig­i­tal dol­lars. Last year, the major for­mats broke out as fol­lows. Com­pa­ra­ble fig­ure for 2017 appear in paren­the­ses.

  • Search 45% (46%)
  • Ban­ner 31% (31%)
  • Video 15% (13%)
  • Oth­er 9% (9%)

The spend­ing pat­terns indi­cate a ris­ing inter­est in video and a slight drop-off in search. Remem­ber that ban­ner adver­tis­ing includes dis­play, rich media and spon­sor­ship. Oth­er includes clas­si­fieds, lead gen­er­a­tion, audio and unspec­i­fied.

In mobile ad spend­ing dur­ing 2018, all cat­e­gories except video lost a slight share. That’s because mobile video grew from 12% in 2017 to 15% of the total in 2018. Between 2016 and 2018, mar­keters increased their pur­chas­es of mobile video adver­tis­ing from $4.0 bil­lion to $10.2 bil­lion.

Ad spend­ing by media cat­e­go­ry in 2018 looked like this:

  • Inter­net adver­tis­ing 39.24%
  • TV 25.91%
  • B2B 9.57%
  • Mag­a­zines 7.32%
  • Radio 6.5%
  • News­pa­per 5.72%
  • OOH 3.66%
  • Music 1.21%
  • Video games 0.53%
  • Cin­e­ma 0.35%

How do your clients’ ad bud­gets com­pare? Share this data with them and then talk about the best ways to reach their tar­get audi­ences. Con­sult the pro­files avail­able on Audi­enceS­CAN, avail­able at AdMall from Sales­Fu­el, for more infor­ma­tion on which ad for­mats dri­ve con­sumers to take action.

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-owner of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.