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US digital AD revenue surged 22 percent last year

  • Author:share
  • Source:Google
  • Release on:2019-05-09
U.S. digital AD revenue surged 22 percent last year, topping $100 billion for the first time

undeniably, digital advertising has been the hottest form of advertising media.

Digital advertising revenue in the United States surpassed the $100 billion mark for the first time last year, reaching $107.5 billion, up 21.8 percent from $88.3 billion in 2017, according to the latest Internet advertising report released by research firm IAB and pricewaterhousecoopers.

Mobile digital advertising revenues dominated, rising 40 per cent year-on-year to $69.9bn. Revenue from digital ads on computers edged down 1.5 percent to $37.6 billion.

It's worth noting that while digital advertising has seen double-digit growth, TV AD and radio AD revenue have grown by only 1.4 percent and 1 percent, respectively, compared with 6.9 percent and 2.1 percent year-over-year declines in newspaper and magazine AD revenue in 2018.

In addition, the report measures the revenue of the top 10 AD sales companies. In 2018, 75 percent of digital AD revenue will be collected by these companies. The IAB says the ratio has fluctuated between 69% and 77% over the past decade.

As of February, Google is expected to account for 37.2% of U.S. digital AD revenue, according to market-research firm eMarketer, and Facebook is expected to account for 22.1% by the end of 2019. The group also said in March that amazon, Facebook and Google are expected to receive nearly 70 percent of U.S. digital AD spending by 2021.

Sue Hogan, IAB's senior vice President of research and measurement, said that while people used to spend a lot of time on mobile devices, mobile advertising revenue has not been able to match it: "now the balance is almost there, where there are eyeballs, there are revenues."

This, says David Silverman, a partner at pricewaterhousecoopers, raises the question of whether growth will slow once advertising revenues catch up with consumer attention.

The IAB report noted that while social media advertising revenue grew 30.6 percent in 2018 to $28.9 billion, the pace of expansion in the sector has been slowing, well below the 46.6 percent compound annual growth rate of social media advertising revenue from 2012 to 2018.

But if the industry can find the right way to boost AD revenue before then it will find it again, Silverman said, with digital and audio AD revenue up 23 percent to $2.3 billion and new channels like outdoor advertising also increasing revenue.