www.iab.comwww.pwc.com/e&mIAB internet advertisingrevenue report2017 first six months resultsAn industry survey conducted by PwC and sponsored byInteractive Advertising Bureau (IAB)December 2017
Table of contentsBackground . 1Executive summary .2Year-to-date revenues continue to show strong growth .3Detailed findings .4Shift from desktop to mobile expands .5Continued historical quarterly revenue trends.6Historical revenue mix – first half vs. second half. 7Revenue concentration .8Ad format – second quarter 2017 results.9Ad format – half year 2017 results. 10Historical Trends: Desktop vs. Mobile.11Shifts occurred across the Search and Digtial Video formats . 12Digital Video – Mobile catches up to desktop . 13Social media advertising revenue . 14Digital audio - on track to exceed last year’s full-year revenue of 1.1B. 15Revenues by pricing model . 16Any trademarks included are trademarks of their respective owners and are notaffiliated with, nor endorsed by, PricewaterhouseCoopers LLP, its subsidiaries oraffiliatesPwC IAB internet advertising revenue report
BackgroundAbout the IAB internet advertisingrevenue reportConducted by PwC Advisory Services LLC (“PwC”) on an ongoingbasis, with results released quarterly, the “IAB Internet AdvertisingRevenue Report” was initiated by the Interactive AdvertisingBureau (IAB) in 1996. This report utilizes data and informationreported directly to PwC from companies selling advertising on theinternet as well as publicly available corporate data.The results reported are considered to be a reasonablemeasurement of internet/online/mobile advertising revenuesbecause much of the data is compiled directly from informationsupplied by companies selling advertising online. The reportincludes data reflecting desktop and mobile online advertisingrevenues from websites, commercial online services, ad networksand exchanges, mobile devices, and email providers, as well asother companies selling online advertising.The report is conducted independently by PwC on behalfof the IAB. PwC does not audit the information andprovides no opinion or other form of assurance withrespect to the information. Only aggregate results are publishedand individual company information is heldin strict confidence with PwC. Further details regarding scope andmethodology are provided in the appendix tothis report.David SilvermanPwCPwC IAB internet advertising revenue report1
Executive summaryIAB internet advertising revenue report 2017 second quarter and firstsix months highlightsInternet advertising revenues (“revenues”) in the United States totaled 40.1 billion for the first six months of 2017,with Q1 2017 accounting for approximately 19.4 billion and Q2 2017 accounting for approximately 20.8 billion.Revenues for the first six months of 2017 increased 22.6% over the first six months of 2016.Key trends underlying Half-Year (HY) 2017 resultsRevenues increase 22.6% in HY 2017Internet advertising revenues in the United States totaled 20.8 billion in the second quarter of 2017, an increase of7.4% from the 2017 first-quarter total of 19.4 billion and an increase of 23.1% from the 2016 second-quarter totalof 16.9 billion. Year-to-date revenues through June 2017 totaled 40.1 billion, up 22.6% from the 32.7 billionreported in 2016.The shift to mobile continuesAdvertising revenues delivered on mobile devices totaled 21.7 billion in HY 2017, a 40% increase from the priorhalf year revenues of 15.5 billion. Advertising delivered on a mobile device now make up 54% of total internetadvertising revenues.“Being nimble and accessible are hallmarks of the newdigital economy. Now, anyone with a good idea and acredit card can capture the attention of theircustomers directly, and this in turn represents anenormous growth opportunity for both marketers andpublishers alike to help make these connections.”— Randall Rothenberg, President and CEO, IAB“We should no longer think of the internet as mobile vsdesktop. Advertisers are simply following consumers,who live their lives online—whether on a smartphoneduring a commute, on a desktop at work, or on atablet for entertainment in the evening. Digital is anintrinsic part of every American’s day.”— David Silverman, Partner, PwCPwC IAB internet advertising revenue report2
Year-to-date revenues continue to showstrong growthHY 2016 vs. HY 2017 (billions) )22.6% 40.1 32.7Revenues for HY 2017totaled 40.1 billion, 7.4 billion (22.6%)higher than in HY 2016HY 2016HY 2017Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report3
Detailed findingsRevenues totaled 20.8 billion in Q2 2017Total second-quarter revenues were 3.9 billion (23.1%) higher than in the second quarter of 2016 and 1.4 billion(7.4%) higher than in the first quarter of 2017.Q2 2016 vs. Q2 2017( billions)23.1%7.4% 20.8 20.8 19.4 16.9Q2 16Q1 2017 vs. Q2 2017( billions)Q2 17Q1 17Q2 17Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report4
Shift from desktop to mobile expandsFor Q2 2017, mobile increased its share of internet advertisingrevenue to 54%2017 second-quarter revenues increased 23.1% on a year-over-year basis, resulting in a 10-year compound annualgrowth rate (CAGR), 2008-2017, of 15.4%. On a year-over-year basis, mobile’s advertising revenue increased 40%,increasing its share of total revenues from 47% in HY 2016 to 54% in HY 2017. The result is a 6-year compoundannual growth rate (CAGR) of 76.8%, reflecting an increase in total revenues from 2012 – 2017.2008 – 2017 ( billions)Mobile7676.8%Non-MobileMobile CAGR 20.81515.4%Overall CAGR 16.9 14.3 10.3 5.7 5.4 11.7 4.4 11.4 8.2 2.8 7.7 8.8 0.7 1.6 8.1 8.6 8.9 9.9 7.720112012201320142015 6.2 5.7 5.4 6.2200820092010 8.7 9.420162017Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report5
Continued historical quarterlyrevenue trendsQuarterly growth continued upward trendFrom the momentum built in 2010, internet advertising continues to show strong growth. After a recurringseasonal dip in Q1, Q2 2017 revenues continued to trend upward, although they remained below the high mark setin Q4 2016.Since 2010, a strong seasonal trend has emerged for internet advertising revenues. With each annual cycle, revenuepeaks in the fourth quarter, and is followed by a dip in the first quarter.Quarterly revenue growth trends 1996 – 2017 ( billions) 25 20 15 10 32014201520162017 0Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report6
Historical revenue mix – first half vs.second halfFirst half revenues reached 40.1 billionApplying historical seasonal data, the first six months of 2017’s revenues ( 40.1 billion) are on an expected annualrun-rate to make 2017 the highest year in revenues, and on pace to exceed last year’s previous highest annual totalof 72.5 billion.Historical revenue mix, first half vs. second half revenues( billions) 90Over the past ten years,second half revenues averaged53% of the annual total 80 70 60? 39.8 50 32.1 40 26.4 30 20 10 0 13.9 11.2 11.9 11.8 16.8 19.5 22.7 23.1 27.5 17.0 20.1 14.9 12.1 11.5 10.9 10.0 32.7 40.12007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Last 6 monthsFirst 6 monthsSource: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report7
Revenue concentrationTop 10 companies command 75% of revenues in Q2 2017Online advertising revenues remain concentrated with the 10 leading ad-selling companies, accounting for 75% oftotal revenues in Q2 2017, consistent with the percentage reported in Q2 2016. Companies ranked 11th to 25thaccounted for 9% of revenues in Q2 2017, a two percentage point decrease from the 10% reported in Q2 2016.The concentration of top 10 revenues have fluctuated over the past ten years, between 69% and 75%.% share of total revenues2017 25Q2 ShareTop 10 20Top 2516%Remaining9% 1575% 10 0052004 0Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report8
Q2 2016 ****Ad formats Q2 2016Total-Q2 201712% 16.9Ad formats Q2 on***Video30% 20.8Other**31%Ad format – second quarter 2017 resultsSearch related revenues as a percentage of total revenues decreasedwhile digial video revenues continue to increase The Search format totaled revenues of 9.7billion in Q2 2017, up 15% from Q2 2016 ( 8.4billion). The Search format’s representation of47% of total internet advertising revenue for Q22017 is a slight year-over-year decrease fromQ2 2016’s 49%.Digital video totaled 2.7 billion for Q2 2017,up 0.7 billion or 33%, from Q2 2016’s 2.1 billion.The Display-related* format totaled revenues of 9.3 billion in Q2 2017, up 29% from Q2 2016 ( 7.2 billion). Display-related* advertisingincludes Banner Ads (31% of revenuesor 6.5billion), and Video (13% or 2.7 billion). Dislayrelated* format’s representation of 45% of totalinternet advertising revenue for Q2 2017 is aslight year-over-year increase fromQ2 2016’s 43%.The Other** category, which accounted for 9%of Q2 2017 revenues is primarily comprised ofClassifieds ( 0.8 billion), Lead Generation( 0.7 billion), and Audio ( 0.3 billion).* Display-related formats include: Banners (Banners, Rich Media, and Sponsorship) and Video.** Other includes: Classifieds, Lead Generation, Audio, and Unspecified Other (“Unspecified Other” category was notspecified by respondents).*** Amounts may not equal 100% due to rounding and omission of minor categories.**** Certain prior year amounts have been reclassified to conform with the current year presentation:( millions)SearchBannerVideoOtherAs originally reported 8,354 5,204 2,025 1,306As revised 8,270 5,145 2,001 1,473Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report9
HY 2016 ****Ad formats HY 2016Total-HY 201712% 32.7Ad formats HY on***Video30% 40.1Other**31%Ad format – half year 2017 resultsThe growth of display-related advertising revenue held for the firstsix months of 2017 The Search format totaled revenues of 19.1billion in HY 2017, up 18.4% from HY 2016( 16.2 billion).The Search format’s representation of 48% oftotal internet advertising revenue for HY 2017is a slight year-over-year decrease from HY2016’s 49%.Digital Video totaled 5.2 billion for HY 2017,up 1.4 billion or 35.8% from HY 2016.The Display-related* format totaled revenues of 17.6 billion in HY 2017, up 28% from HY 2016( 13.7 billion). Display-related* advertisingincludes Banner Ads (31% of HY 2017 revenues, or 12.4 billion), and Video (13% or 5.2billion).Display-related* format’s representation of 44%of total internet advertising revenue for HY2017 is a slight year-over-year increase fromHY 2016’s 42%.The Other** catgory, which accounted for 9% oftotal HY 2017 revenues was primarilycomposed of Classifieds ( 1.5 billion), LeadGeneration ( 1.3 billion), and Audio ( 0.6billion).* Display-related formats include: Banners (Banners, Rich Media, and Sponsorship) and Video.** Other includes: Classifieds, Lead Generation, Audio, and Unspecified Other (“Unspecified Other” category was notspecified by respondents).*** Amounts may not equal 100% due to rounding and omission of minor categories.**** Certain prior year amounts have been reclassified to conform with the current year presentation:( millions)SearchBannerVideoOtherAs originally reported 16,325 9,980 3,880 2,554As revised 16,160 9,863 3,832 2,884Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report10
Historical Trends: Desktop vs. MobileThe Shift to Mobile continues Mobile ad revenues continued to gain share, representing 54% of total HY 2017 revenues, as compared to 47%of total revenues reported in HY 2016 and 30% in HY 2015.Mobile, like Desktop, is comprised of multiple %30%23%20%10%54%47%14%7%0%HY 2012DesktopHY 2013HY 2014HY 2015HY 2016HY 2017MobileSource: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report11
Shifts occurred across the Search andDigtial Video formatsAcross desktop and mobile platforms, Search slips while DigitalVideo gains The Search format experienced minor growth across both desktop and mobile platforms, 4% and 37%respectively; however, the format also saw a reduction in percent of total revenue across both platforms, aloss of two perecentage points on desktop and one percentage point on mobile.For HY 2017, the Digital Video format grew across both desktop and mobile platforms, 15% and 65%respectively.2016****Desktop Ad formatsHY 2016 v HY 201712%13% 17.2billion 52%23%201712%14% 18.4billion 50%23%2016****BannerVideoOther**20175%10% 15.5 47%billion38%SearchSearch5%12%Banner 21.7 46%billionVideoOther**37%Mobile Ad formatsHY 2016 v HY 2017***Source: IAB/PwC Internet Ad Revenue Report, HY 2017* Display-related formats include: Banners (Banners, Rich Media, and Sponsorship) and Video.** Other includes: Classifieds, Lead Generation, and Audio.*** Amounts may not equal 100% due to roundingand omission of minor categories.**** Certain prior year amounts have been reclassified to conform with the current year presentation( millions)SearchBannerVideoOtherAs originally reported (mobile) 7,431 6,004 1,628 455PwC IAB internet advertising revenue reportAs revised (mobile) 7,266 5,887 1,580 78512
Digital Video – Mobile catches up todesktopIn HY 17, mobile video revenue pulls along side desktop video revenuefor the first time On desktop, digital video continued to serve asthe key growth driver in HY 2017, increasing15% over HY 2016, to 2.6 billion.HY 2017 Total digital video, including mobile anddesktop, rose to 5.2 billion in HY 2017, up 37%from 3.8 billion in HY 2016.Growth of digital video on smartphones andtablets continued, reaching 2.6 billion in HY2017, a 65% rise from HY 2016. 2.6HY 2016 2.6 0.0 1.6* 2.3 0.5 1.0 1.5Mobile Video 2.0 2.5 3.0Desktop VideoHistorical Digital Video Revenues, Half Year ( billions)*Certain prior year amounts have been reclassified to confirm with the current year presentation:( millions)VideoAs originally reported 3,880As revised 3,832Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report13
Social media advertising revenueSocial Media advertising revenue totaled 9.5 billion for the first sixmonths of 2017, compared to 7.0 billion in half year 2016For the first half of 2017, Social Media revenue was 9.5 billion. Year-over-year, Social Media revenue was up 37%from HY 2016. Social continues its half-year growth trends - increases are reflected in the 51% compound annualgrowth rate of social from 2013 to 2017.Note: We define social media as advertising delivered on social platforms, including social networking and social gamingwebsites and apps, across all device types, including desktop, laptop, smartphone and tablet.Source: IAB/PwC Internet Ad Revenue Report, HY 2017* CAGR: Compound Annual Growth RatePwC IAB internet advertising revenue report14
Digital Audio - on track to exceed lastyear’s full-year revenue of 1.1BThe first six months of 2017 saw 603 million in audio advertisingrevenueThis represents a 42% increase over HY 2016’s revenue of 425 million. Additionally, digital audio advertising’spercentage of total internet advertising revenue spend increased from 1.3% in HY 16 to 1.5% in HY 17.Digital audio advertisingrevenues by platform, HY 2017 (in millions)* 155 448Mobile AudioDesktop AudioSource: IAB/PwC Internet Ad Revenue Report, HY 2017*Podcast advertising revenue is not included in the digital audio adveritising revenue figures for Hy 2016 or HY 2017.PwC IAB internet advertising revenue report15
Revenues by pricing modelPerformance-based pricing shows slight downtick while cost permedium/thousand shows slight uptick Approximately 65% of HY 2017 revenues were priced on a performance basis, consistent with the 65%reported in HY 2016.Approximately 33% of HY 2017 revenues were priced on a cost per medium/thousand (CPM) or impressionbasis, down slightly from the 34% reported in HY 2016.Approximately 2% of HY 2017 revenues were priced on a hybrid basis, a modest gain from the 1% reportedin HY 2016.Source: IAB/PwC Internet Ad Revenue Report, HY 2017PwC IAB internet advertising revenue report16
Historical pricing model trendsPerformance-based pricing resumes modest growth in HY 17 Performance-based pricing, the leading pricing model since 2006, ticked up slightly to 65% of total revenuein HY 2017.CPM/impression-based pricing fell slightly in HY 2017, down to 33% of revenue from 34% inHY 2016.Hybrid pricing increased to nearly 2% of total revenues in HY 2017, up from the 1% reported in HY 2016.Internet ad revenues by pricing model*70%60%% of total revenues50%40%57%48%46%59%66%65%66%65%33% 31%32%33%33%2%2%1%62%65% 64%65%51%47%45%41%39%30%37%33% 35%33%20%13%10%5% 4%4%4%5%4%2%1%2%0%2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017CPMPerformanceHybridSource: IAB/PwC Internet Ad Revenue Report, HY 2017* Pricing model definitions may have changed over the time period depicted both within the survey process and as interpretedby survey respondents.PwC IAB internet advertising revenue report17
AppendixPwC IAB internet advertising revenue report18
Definitions of advertising formats and pricing modelsBanneradvertisingAdvertiser pays an online company for space on one or more of the online company’s pagesto display a static or linked banner or logo.SponsorshipAdvertiser pays for custom content and/or experiences, which may or may not include adelements such as display advertising, brand logos, advertorial, or pre-roll video. Sponsorshipsfall into several categories: Spotlights are custom-built pages incorporating an advertiser’s brand and housing acollection of content usually around a theme Advergaming can range from an advertiser buying all the ad units around a game or a“sponsored by” link to creating a custom branded game experience Content & Section Sponsorship is when an advertiser exclusively sponsors aparticular section of the site or email (usually existing content) re-skinned with theadvertiser’s branding Sweepstakes & Contests can range from branded sweepstakes on the site to a full-fledgedbranded contest with submissions and judgingEmailBanner ads, links or advertiser sponsorships that appear in email newsletters, email marketingcampaigns and other commercial email communications. This includes both ads within anemail or the entire email.SearchFees advertisers pay online companies to list and/or link their company site domain name to aspecific search word or phrase (includes paid search revenues). Search categories include
PwC IAB internet advertising revenue report 5 Shift from desktop to mobile expands For Q2 2017, mobile increased its share of internet advertising revenue to 54% 2017 second-quarter revenues increased 23.1% on a year-over-year basis, resulting in a 10-year compound annual
Source: IAB/PwC Internet Ad Revenue Report, FY 2018 88.3* 107.5 FY 2017 FY 2018 21.8% YoY growth * Restated due to inclusion of podcast revenue ( millions) Q1 2017 Q2 2017 Q3 2017 Q4 2017 As originally reported 19,352 20,786 21,764 26,106 As revised 19,404 20,847 21,832 26,183 Source: IAB/PwC Internet Ad Revenue Report, FY 2018
ADVERTISING OPTIONS InsightNews.com Over 1,000 impressions per day. Podcasts, local and world news. Online display and free classified advertising available. Sizing: All ad sizes in pixels IAB Skyscraper: 120 x 600 IAB Button (2): 120 x 90 IAB Medium Rectangle: 300 x 250 Front Page: IAB Skyscraper: 375 weekly IAB Button (2): 250 weekly
YouTube, which is reported in the 'Video' group. 2021 IAB Canada Internet Ad Revenue Survey -June 2022 Methodology Sample profile and data collection 10 . 2021 IAB Canada Internet Ad Revenue Survey -June 2022 16 Percentage of total: Variance 2021 vs. 2020: 2021 Results Year-over-year increase of 28.1% 97.4M 64.0% 54.7M 36% Podcasts
2014 Content, Research and Standards developed to date AdTech Lumascape in SEA Introduction to Video Advertising film Innovation white paper State of Video in SEA study IAB/IDA/comScore Admetrix research Submission to IAB Global Mobile Anthology New www.iab.sg website with Research portal
2020 IAB Canada Internet Ad Revenue Survey -September 2021 Internet Advertising Revenue in Canada recorded a growth of 11.1% compared to 2019 despite the initial shock of COVID-19 impact.Despite the decline experienced by all industries in the first half of 2020, the sector recovered by the end of the year.
IAB Cross-Media Ad Effectiveness Study 2 The IAB would like to thank its sponsors for their financial contribution to this study: Gold Sponsor: Bronze Sponsors: Intro and Background 3 The IAB, at the request of the IAB Research Council leadership and with support of the full Research Council, conducted a study to
Nathalie Peters IAB Netherlands Chairman The growth of digital advertising spend continues and we can definitely say that it surpasses all non-digital media. What we saw happening in the CMO innovation report can also be seen here: non-digital becomes digital. We have seen growth in the shift from traditional TV advertising to online video for
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