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Internet Advertising Revenue Report Summary (HY 2019)

Core Content

The IAB Internet Advertising Revenue Report provides an overview of the growth and trends in internet advertising revenue for the first half of 2019, highlighting the shift from desktop to mobile advertising and the increasing dominance of digital video. The report is prepared by PwC and is part of the IAB's ongoing mission to offer an accurate and industry-accepted barometer of internet advertising growth.

Key Findings

• Total Internet Advertising Revenue for HY 2019: $57.9 billion, representing a 16.9% increase compared to HY 2018 ($49.5 billion).
• Quarterly Growth:
  • Q2 2019: $29.9 billion, a 16.7% increase from Q2 2018 ($25.6 billion).
  • Q1 2019: $4.1 billion, a 17.2% increase from Q1 2018 ($3.5 billion).
• Mobile Advertising Growth: Mobile advertising revenue increased its share to 69.0% in HY 2019, indicating a significant shift from desktop.
• Format Growth:
  • Digital Video: Showed the largest growth among advertising formats in HY 2019.
  • Banner Ads: Included in the display category, which remained a major component.
  • Social Media: Continued its rise with a 25.7% increase in revenue from HY 2018 to HY 2019.
  • Digital Audio: Reached $1.2 billion in revenue for HY 2019.
• Pricing Models:
  • Performance-based pricing remains the dominant model in internet advertising.
  • The report notes that pricing model definitions may have evolved over time, affecting comparisons.

Methodology Overview

PwC compiles data using the following approach:

• Database Compilation: Builds a comprehensive list of industry participants involved in internet advertising.
• Quantitative Surveys: Conducts surveys with leading players such as web publishers, ad networks, and online service providers.
• Data Collection: Requests monthly gross commissionable advertising revenue by transaction.
• Supplemental Data: Uses publicly disclosed information to fill in gaps.
• Non-participating Companies: Applies conservative estimates based on available public data.
• Analysis and Reporting: Identifies and reports key trends, ensuring confidentiality by releasing only aggregate data.

Historical Trends

• Revenue Shift: Over four years, mobile and desktop advertising revenue shares have swapped, with mobile now dominating.
• Digital Video Growth: Continued to gain market share on both desktop and mobile, reinforcing its dominance in the first half of 2019.
• First Half vs. Second Half: For the first time since 2009, first-half revenues were $30 million less than the previous second-half revenues.

Top 10 Companies

• The top 10 companies accounted for the majority of total advertising revenues, underscoring the concentration of market power among a few major players.

Contributors

• Susan (Sue) Hogan: SVP, Research & Analytics at IAB
• Chris Bruderele: Sr. Director, Research & Analytics at IAB
• David Silverman: Partner, Assurance Services at PwC
• Stephen Krasnow: Manager, Advisory Services at PwC

Notes

• The report includes historical data and quarterly trends for better context and analysis.
• Confidentiality: The process is confidential, with only aggregate data released.
• Data Sources: Includes both direct company data and publicly disclosed information.

This report serves as a valuable resource for understanding the evolving landscape of internet advertising, with a focus on growth, format dominance, and the increasing reliance on performance-based pricing models.