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Digital advertising spend outstrips TV in US as UK print revives

Spend on digital advertising has overtaken that of television in the United States for the first time.

Last year, internet advertising revenues in the United States hit $88bn (€77bn), an increase of 21pc on the previous year, according to the latest ‘Internet Advertising Revenue’ report from professional services firm PwC and the Interactive Advertising Bureau (IAB).

In comparison, television advertising fell 2.6pc year-on-year to $70bn (€61.5bn) in 2017.

A main driver of the increase in internet advertising has been a shift to mobile. Spending on advertising delivered to mobile devices totalled $49.9bn in 2017 in the US, a 36pc increase from the prior year, as marketers target larger numbers of consumers through their mobile phones.

“Consumers are increasingly spending a tremendous amount of time with interactive screens and content, from mobile to desktop and audio, and brands are in lockstep with a growing commitment to digital ad buys,” said Randall Rothenberg, CEO of the IAB.

“Mobile captured more than half of the total digital ad spend last year and we can expect that share to continue to climb.”

Advances in technology are driving the growth in the industry, with greater internet access and speed of connection all cited as factors behind the growth.

From a marketer’s perspective, the digital ad industry claims it can apply analytics and artificial intelligence to massive volumes of data and so better target end users.

While advertising delivered on mobile devices now makes up 56.7pc of total internet advertising revenues and is charging ahead in the digital online spend, desktop revenues rose far less quickly – up 5.8pc to $38.1bn, the report found.

Search revenues and video revenues represented the bulk of the internet advertising revenue last year, making up 46pc and 31pc of internet advertising revenue respectively. Looking forward, the report suggests that new technologies such as artificial intelligence (AI), augmented reality, virtual reality, and voice-based systems will create new opportunities for growth within the advertising industry. “Continued advances in AI and data and analytics will enable companies to create more personalised experiences than what we see today,” David Silverman of PwC said.

The IAB report utilises data and information from companies selling advertising on the internet, public corporate data, survey responses and interviews with industry participants.

Despite the strong performance in digital advertising in the US, in the UK there are signs of a revival in print advertising.

In the first three months of 2018, ad revenue for UK national news brands rose for the first time in seven years, according to the UK’s Advertising Association/WARC Expenditure Report.

The strong start to the year in newspaper advertising follows a good final quarter in 2017, reversing the seven-year downturn in display revenue, according to the report.

The UK numbers also show TV also posted relatively healthy growth of 5pc. Total internet spend rose 10.8pc – with search engine spending accounting for over half of the gain.

“Online ad formats – particularly search and social media – continue to overperform, but traditional media are also proving their worth to advertisers”, said James McDonald, WARC’s Data Editor.

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