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In a first, mobile ads in US account for over half of all Internet advertising

Digital marketers are significantly repositioning themselves to focus on mobile users. Mobile advertising accounted for more than half of the $72.5 billion spent by advertisers on digital advertising in the US last year, according to a report made by accounting firm PwC for the Interactive Advertising Bureau. The total represents a 22 percent increase, up from $59.6 billion in 2015. Mobile experienced a 77 percent upswing from $20.7 billion the previous year, hitting $36.6 billion in 2016.

Total Internet revenue jumps by a fifth

Internet ad revenue in the United States totaled $21.6 billion in Q4 2016, which is almost 19% higher than 2015. A large amount of this growth was pushed by mobile spending. Many brands are going from “mobile-first” to “mobile-only”, a sign of advertiser confidence in digital, IAB President and CEO Randall Rothenberg said. This came as search ad revenue from desktop devices went down from $5.6 billion in Q4 2015 to $4.7 billion in Q4 2016.

Including Mobile Search revenue, total Search revenue was $10 billion (46% of total) in Q4 2016, up 18% from Q4 2015 ($8.5 billion).

Mobile share increases as other categories decline

The share of mobile advertising revenue rose sharply, but other categories, such as video, search, and banner ads, either plummeted or remained at around the same levels. This comes as digital marketers reorient themselves significantly towards mobile users.

Mobile video is also progressing rapidly, and is set to match desktop video revenues as soon as next year. Below is a comparison of desktop and mobile video revenue in 2015 and 2016.

Social media grows steadily; audio makes $1.1bn

Social media has had a half-yearly earnings growth from $7 billion in the first half of 2016 to $9.3 billion in the second half. Since 2012, this represents a 54% compounded annual growth rate, which means that the number has grown by half on average, for every year since 2012. IAB also started counting audio advertising revenue, such as those from streaming music services like Spotify. The revenues here were, again, mostly driven by mobile, which made $892 billion in 2016. Combined with desktop audio, which made less than a fourth of that amount, audio revenues came out to $1.1 billion.

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Other stats

  • Digital video spending was $9.1 billion in 2016, a 53% YoY increase from $5.9 billion in 2015
  • On mobile devices, video revenue more than doubled—up 145 percent year-over-year—to nearly $4.2 billion
  • Social media advertising generated $16.3 billion last year, 50 percent higher than 2015’s $10.9 billion
  • Search revenues reached nearly $35 billion in 2016, up 19 percent from $29.5 billion in 2015
  • Digital audio, a new category, brought in revenues of $1.1 billion in 2016
  • Retail, representing 21.3 percent of internet ad spend in 2016, Financial Services at 13.3 percent, and automotive at 12.5 percent, continue to have the largest category share, with Media (5.2%) picking up speed, up 13 percent over 2015

Written By

I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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