Internet ad revenue reaches record high in 2014

Steven Loeb · April 22, 2015 · Short URL: https://vator.tv/n/3d52

In all, $49.5 billion was spent in 2014, an increase of 16 percent year-to-year

Do you like Internet advertising? Of course you do! Who doesn't, right? Video ads taking over our screen, or music that starts playing from... somewhere, which you can't figure out how to turn off. It's great! Well, get ready for lots more of it. Now that Internet ad revenue in the United States reached an all-time high in 2014, it will likely keep growing in the years to come.

Digital advertising revenues reached $49.5 billion in 2014, an increase of 16 percent from 2013, which had also set a record with $42.8 billion, according to a new report out from the Interactive Advertising Bureau (IAB), on Wednesday. This marks the fifth consecutive year of double-digit growth.

Mobile also had a great year, rising 76 percent, going from $7.1 billion in 2013 to $12.5 billion in 2014. That means it also rose from making up 17 percent of total revenue to 25 percent.

When broken down by ad format, search advertising is, by far, the most lucrative. It totaled $19 billion in 2014, for 38% of the market, up 3 percent from 2013, when search totaled $18.4 billion and 43% of the market. The second most lucrative ad format was display ads, which accounted for $13.5 billion, or 27 percent of the year’s revenues, a 5 percent increase over $12.8 billion, ad 30% share, in 2013.

One of the biggest parts of the display ad category was digital video, which brought in $3.3 billion in 2014, an increase of 17 percent over revenues of $2.8 billion in 2013. It remained at 7% of all revenue year-to-year.

“High double-digit growth in mobile advertising is a reflection of the continued shift in consumer behavior away from desktop and towards mobile devices,” David Silverman, Partner at PwC US, who helped put the report together. “A prominent rise in social, a significant mobile activity, is driving growth in advertising revenue as consumers spend more time connected.”

When it came to which categories spent the most on advertising, none of them really dominated ad spending last year, with retailers representing 21 percent of all spending, while financial services accounted for 12 percent and automotive was 13 percent.

And, finally, it looks like what advertisers really want most of all is an actual result from their ads, not just the knowledge that people merely saw them. Impression-based models brought in $16.5 billion, for 33 percent of all ad spending. That was up from $14 billion in 2013.

Performance-based models, meanwhile, took in $32.4 billion, which represented 66 percent of revenue. That was up from $27.8 billion the year before.

The hybrid of the two actually went down year-to-year, from $696 million to $511 million.

(Image source: exactdrive.com)