Internet Ad Revenue Outpaces Broadcast TV Ad Revenue for the First Time

Posted by at 11:37 am on April 10, 2014

Randall RothenbergFor the first time, marketers spent more to advertise on the Internet than they did for broadcast television in 2013. Investments in U.S. interactive advertising reached $42.8 billion in Internet advertising last year — up 17% from 2012, per the IAB Internet Advertising Revenue report.

Randall Rothenberg, president and CEO of the IAB, said in a prepared statement that the news that interactive has outperformed broadcast television should come as no surprise. More brands now depend on digital media like search engine marketing and mobile media to augment broadcast television campaigns.

The report, released Thursday by the Interactive Advertising Bureau (IAB) and prepared by Pricewaterhouse Coopers (PwC) U.S., also reveals that fourth-quarter revenue for 2013 reached $12.1 billion, up 17% from the $10.3 billion in the year-ago quarter. The total represents an uptick of 14% from Q3 in 2013, when revenue totaled $10.6 billion.

“It speaks to the power that digital screens have in reaching and engaging audiences,” Rothenberg said. “The staggering growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers’ lives throughout the day, as well as their critical importance to cross-screen experiences.”

Search and mobile marketing supported the increase in spend. Revenue from search ads rose 9% to $18.4 billion, and mobile rose 110% to $7.1 billion for the year, accounting for 17% of 2013 revenue. In search, the percentage of share fell from 46% in 2012 to 43% in 2013, but the amount spent rose from nearly $17 billion to more than $18 billion, respectively.

Online video, part of the display-related advertising numbers, brought in $2.8 billion in 2013 — up 19% compared with the $2.3 billion in 2012, increasing its share to become the fourth largest format behind mobile.

Display-related advertising revenue reached $12.8 billion, or 30% of the year’s revenue, up 7% over $12 billion in 2012.

Retail advertisers continue to represent the largest category of Internet ad spend, attributing 21% in 2013, followed by financial services and automotive, which account for 13% and 12% of the revenue, respectively.

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