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SEO Web Design / SEO  / Online ad revenue was almost $125 billion in 2019 but growth is slowing

Online ad revenue was almost $125 billion in 2019 but growth is slowing

Digital advertising in 2019 was worth $124.6 billion, according[1] to the IAB and PriceWaterhouseCoopers. That’s about $54 billion more than advertisers spent on television, the number two medium.

Online ad growth is slowing, however. Last year, it came in just under 16% year-over-year, $17 billion more than 2018. Categories that exceeded the overall 16% growth rate included:

  • Online video advertising – 33.5%
  • Mobile – 24%
  • Social media advertising – 23%
  • Internet audio advertising – 21.2%

Roughly 70% of digital ads were served and seen on mobile devices, a five-point gain from last year. But, mobile ad revenue growth is slowing too, “as the underlying platform is maturing.” Desktop revenue, however, is nearly flat: $37.9 (2019) vs. $37.6 billion (2018).

Revenue share by channel. Paid search captured 43.9% of total ad revenue, reaching $54.7 billion in 2019, up about 13% year-over-year. Display advertising and sponsorships had a roughly 31% share ($38.1 billion). Video’s share was about 17% ($21.7 billion), an increase of 33.5% compared with 2018. The remaining $10 billion consisted of classifieds ($4.0 billion), lead-gen ($3.4 billion) and audio advertising ($2.7 billion).

Ad buying through programmatic platforms reached $57 billion, which was nearly $10 billion more than last year. To put that in context, programmatic is driving the vast majority (81.5%) of “non-search advertising” online.

Perhaps more concerning than slowing growth is the concentration of revenue in fewer companies. According to the IAB, the top 10 internet companies controlled about 77% of digital revenue in 2019, up from 76% a year ago. That one-point gain may not sound significant but in real dollars it represents $14 billion in revenue unevenly distributed across 10 companies.

Why we care. The days of explosive online ad revenue growth appear to be winding down. Yet the internet remains the largest ad medium and the only one still growing by double-digits, with the lone exception of e-sports. What’s in store for the remainder of 2020 remains unclear. The IAB says January and February were “strong growth months” but March was sharply impacted by COVID-19. Total revenue for Q1 2020 was $31.4 billion (12% growth YoY) according to the report.

Some firms such as eMarketer continue to predict growth[2] in global ad spend for the year. However, if there is growth, it will likely be in the single digits.

About The Author

Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.


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