2013 Internet Ad Revenues Soar To $42.8 Billion, Hitting Landmark High & Surpassing Broadcast Television For The First Time

Marks a 17% Rise Over Record-Setting Revenues in 2012

Fourth Quarter/2013 Numbers Climb to $12.1 Billion, A 17% Surge in Revenues Over Same Time in 2012

Mobile Sees Year-Over-Year Triple-Digit Growth for the Third Year in a Row

U.S. interactive advertising revenues for 2013 hit an all-time high of $42.8 billion, according to the IAB Internet Advertising Revenue Report for the full-year, exceeding broadcast television advertising* revenues ($40.1 billion), for the first time ever. This momentous figure marks an increase of 17 percent from 2012’s landmark revenues of $36.6 billion. The report, unveiled by the Interactive Advertising Bureau (IAB) and prepared by PwC U.S., also reveals that fourth quarter revenues for 2013 came in at $12.1 billion, an increase of 17 percent from the $10.3 billion brought in during the same quarter in 2012. In addition, this total represents an uptick of 14 percent from 2013’s third quarter revenues at $10.6 billion.

Here are the results from the full year in comparison with last year’s numbers:

Full Year
2012
Full Year
2013
% $ % $
Revenue (Ad Formats)
Search 46% $16,916 43% $18,365
Classifieds and Directories 7% $2,430 6% $2,597
Lead Generation 5% $1,689 4% $1,749
E-mail 0% $156 0% $165
Mobile 9% $3,370 17% $7,084
Display-related
    – Digital Video Commercials 6% $2,330 7% $2,784
    – Ad banners / display ads 21% $7,721 19% $7,943
    – Sponsorships 2% $845 2% $766
    – Rich media 3% $1,113 3% $1,328
        Total display-related 33% $12,009 30% $12,821
Revenue (Pricing Models)
Impression-based 32% $11,709 33% $14,297
Performance-based 66% $24,093 65% $27,788
Hybrid 2% $768 2% $696

Other highlights include:

  • For the third year in a row, mobile achieved triple-digit growth year-over-year, rising to $7.1 billion during full year 2013, a 110 percent boost from the prior year total of $3.4 billion. Mobile accounted for 17 percent of 2013 revenues, whereas it was 9 percent of revenues in 2012.
  • Digital video, a component of display-related advertising, brought in $2.8 billion in full year 2013, up 19 percent over revenues of $2.3 billion in 2012. As a result, it also increased its share to become the fourth largest format, directly behind mobile.
  • Search revenues totaled $18.4 billion in 2013, up 9 percent from 2012, when search totaled $16.9 billion.
  • Display-related advertising revenues in 2013 totaled $12.8 billion or 30 percent of the year’s revenues, a rise of 7 percent over $12 billion in 2012.
  • Retail advertisers continue to represent the largest category of internet ad spending, responsible for 21 percent in 2013, followed by financial services and closely trailed by automotive which account for 13 and 12 percent of the year’s revenues respectively.

“The news that interactive has outperformed broadcast television should come as no surprise,” said Randall Rothenberg, President and CEO, IAB. “It speaks to the power that digital screens have in reaching and engaging audiences. In that same vein, 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.

Our survey confirms that we are fully in transition to the post-desktop era,” said David Silverman, Partner, PwC U.S. “Triple digit advertising revenue growth from mobile devices contrasted the more tepid 8 percent growth from traditional computer screens. This is simply a reflection of the change in how and where consumers are viewing their informationon the go!”

Digital marketing generates large reach and many possibilities to create impact across consumers’ purchase consideration processes, both critically important to advertisers as they seek marketing investments that have value ” said Sherrill Mane, Senior Vice President, Research, Analytics, and Measurement, IAB.

IAB sponsors the IAB Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertisements on the internet.

The survey includes data concerning online advertising revenues from Web sites, commercial online services, free email providers, and all other companies selling online advertising. The full report is issued twice yearly for full and half-year data, and top-line quarterly estimates are issued for the first and third quarters. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. A copy of the full report is available at: iab.net/AdRevenueReport.

The Interactive Advertising Bureau (IAB) is comprised of more than 600 leading media and technology companies that are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C.