Highest increase since 2006; a jump of $50B in a single year
As digital media consumption continues to grow, advertising dollars are following fast. According to the newly released “IAB Internet Advertising Revenue Report: Full Year 2021,” conducted by PwC, all major channels increased significantly compared with a year ago, particularly across digital video (including CTV/OTT), digital audio, social media, and search.
“We fully expected 2021 to be an exceptional year for digital ad growth, but even we were surprised at the degree of acceleration. Not only was every single digital channel up, but some were up more than 50% year on year,” said Libby Morgan, SVP, Chief Strategy Officer, IAB. “This year’s increase is 3x what it was last year.”
The growth is consistent with a recent study from Harvard Business School, commissioned by IAB, which showed the internet economy has grown seven times faster than the U.S. economy over the past four years and now accounts for 12% of the U.S. GDP.
“What’s underneath these numbers is a very clear narrative. We are witnessing the total and complete democratization of access afforded by ad-supported digital channels,” said David Cohen, Chief Executive Officer, IAB. “Increased consumer usage coupled with extraordinary growth of small and mid-sized businesses during the pandemic has fueled growth across all digital — but especially digital audio and video. We expect this digital migration to drive the continued growth of a healthy and competitive digital marketplace driven by innovation and entrepreneurship.”
Streaming media is significantly outpacing the overall industry in growth
Although the industry continues to face uncertainty surrounding privacy regulation, the deprecation of third-party cookies and identifiers, measurement challenges and supply-chain transparency, brands have spoken and digital is where they are putting their dollars:
- Digital video continues to be one of the fastest growing channels, up 50.8% compared to last year, with total revenues of $39.5B.
- Digital audio captured the highest YoY growth, up 57.9% to $4.9B.
- Social media advertising was up 39.3% to $57.7 billion, as consumers continue to engage with Meta platforms, Snapchat, TikTok, and Twitter.
- While search revenue grew substantially (32.8%) in 2021, it did not grow as strong as other areas, leading to a slight decrease in total revenue share (reduction of 0.8 percentage points).
“According to the Census Bureau, 2021 saw the greatest business growth in history with 5.4 million new businesses created,” said Cohen. “Those businesses rely upon the ad-supported internet to attract new customers and provide products and services to the American public. We believe this small business engine will be a key contributor to fuelling ongoing digital media and marketing ecosystem growth.”
What’s next for digital advertising?
Looking ahead to the remainder of 2022, IAB and PwC forecast continued digital ad growth, driven by significant innovation in retail media, CTV/OTT, gaming, and digital audio. The continued rise of AR/VR, the metaverse, and Web3 technologies is expected to spark innovation — and continue to drive ad revenue in the years ahead.
The IAB Internet Advertising Revenue Report: Full Year 2021 can be downloaded here. And please join us for a special webinar today, Tuesday, April 12th from 2:00 PM to 3:00 PM ET for more insights on the report findings and trends.
Methodology
Commissioned by the IAB and conducted by PwC Advisory Services LLC (“PwC”) on an ongoing basis, with results released quarterly, the “IAB Internet Advertising Revenue Report” was initiated by the Interactive Advertising Bureau (IAB) in 1996. This report uses data and information reported directly to PwC from companies selling advertising on the internet as well as publicly available corporate data. The results reported are considered to be a reasonable measurement of internet/ online/mobile advertising revenues because much of the data is compiled directly from information supplied by companies selling advertising online. The report includes data reflecting desktop and mobile online advertising revenues from websites, commercial online services, ad networks and exchanges, mobile devices, and email providers, as well as other companies selling online advertising. The report is conducted independently by PwC, including research by their in-house market research team, on behalf of the IAB. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. Only aggregate results are published and individual company information is held in strict confidence with PwC. Further details regarding scope and methodology are provided in the appendix of this report.
About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.
Sonic Branding For Social Media: Engage, Align, Connect
By Chad Cook -- With more than five billion people accessing social media daily, savvy brands understand the importance of cultivating a strong social identity. They devote massive resources toward brand awareness, audience targeting, content strategy and community engagement. Yet, while they know that social platforms are critical to boosting sales and attracting new customers, many neglect one of the most effective tools for connecting with consumers: sonic branding. Marketers often associate sonic branding with catchy mnemonics used by big brands like McDonald’s, Netflix and Intel in their advertising. But that is a very limited view of what sonic branding is and what it can do. Sonic branding is a way to build awareness and stimulate engagement across all touch points, from advertising to broadcast digital, in-person and social. And it’s not limited to members of the Fortune 500. Brands at all levels can benefit from a sonic identity that is memorable, engaging and reflective of its core values. Sound has been scientifically proven to be deeply tied to memory and emotion. There’s a reason that certain songs stick in your head and bring back memories formed years or even decades earlier. So, it’s surprising that sonic branding is often an afterthought in marketing plans. That is especially true in social media marketing. Faced with tight deadlines and strained budgets, creative teams are often tempted to select music for their content simply because it “fits.” Unfortunately, that may result in content that is in tune with what’s trending but is out of tune with brand identity. Effective sonic branding, by contrast, requires thoughtful strategic planning,... Read More