IAB Sees 2020
12.2% Increase in Digital Advertising
April 8, 2021
the world grapples with the ongoing ramifications of the COVID-19 pandemic, the
digital advertising sector continues to show tremendous resilience. In fact,
according to the newly released “IAB Internet Advertising Revenue Report,”
conducted by PwC, digital advertising revenues increased by 12.2% in 2020
compared to 2019.
“The second half of 2020 made up for the rather abrupt drop in advertising
revenue experienced toward the end of the second quarter,” said Susan Hogan,
Senior Vice President, Research and Analytics, IAB. “We not only had a rebound,
we also had double-digit growth. The Q4 holiday season sales, typical
use-it-or-lose-it year-end spending of media budgets, and revenue from political
advertising all helped to offset the early Covid-19-induced decline.”
Hogan continued, “The surge in consumer adoption of Connected TV, ecommerce
shopping, and at-home deliveries created the pendulum swing needed for digital
media to continue growing. These are just some of the factors that contributed
to ad dollars moving from traditional media to digital media.”
Q4 2020 Provides Optimism for the Future, Reports Record High Growth
Although Q2, year-over-year growth declined by 5.2%, revenues in Q3 and Q4 more
than balanced the scales, returning positive year-over-year growth of 11.7% and
28.7%, respectively. In fact, Q4 2020 had the highest revenue on record for
digital advertising in more than 20 years. The increase in Q4 can be attributed
to a number of factors including both advertising dollars flooding into the
market for the election and the need to spend 2020 budgets that were paused
during the first half of the year because of the pandemic.
Video and Social Media Experienced the Largest Increases Year-Over-Year, Taking
Share from Linear TV
Seemingly pandemic proof, social media advertising revenues reached $41.5
billion in 2020. That 16.3% year-over-year growth attributes social media with
nearly 30% of all internet advertising revenue (29.6%).
video experienced the greatest increase (20.6% year-over-year) in advertising
revenue growth, generating $26.2 billion in 2020. Digital video increased its
share of total internet ad revenue by 1.3% year-over-year, reaching 18.7%.
Programmatic Revenue Grew by Nearly 25% in 2020…But Will it Continue as the
Addressable Landscape Transforms?
Programmatic advertising revenues increased by $14.2 billion in 2020 (+24.9%).
However, the deprecation of 3rd party cookies and identifiers leave many to
wonder if this level of growth is sustainable.
“We expected programmatic growth in double digits. Advertisers are using
automated buying for more formats now, including CTV. The fact that Q2 2020 saw
a shift from performance to mission-based messaging due to COVID-19 accelerated
the speed of programmatic adoption for agencies and brands,” said Hogan.
“However, there is some concern that programmatic delivery could be negatively
impacted once 3rd party tracking is blocked.”