Digital ad spend increased 12% in 2020 despite the effects of the pandemic

The logos of Google, Facebook, Instagram, Twitter, Snapchat and TikTok displayed on a computer screen.

Denis Charlet | AFP via Getty Images

Despite an initial decline due to the Covid pandemic, digital advertising spending rose 12.2% year-over-year in 2020, according to a new report commissioned by the Interactive Advertising Bureau and produced by PwC . But the report also showed that the biggest players in the ecosystem had further strengthened their grip on the U.S. digital advertising market in 2020, gaining more share year on year.

The pandemic caused an immediate decline in advertising budgets in 2020, with areas like travel remaining slow throughout the year. But in the second half of 2020, political ad spending and holiday season sales helped offset losses in the first half of the year to reach a total of $ 139.8 billion for the year. Growth was slower than between 2018 and 2019 when spending increased 15.9%.

The IAB said a sharp increase in smart TV, online shopping and home delivery created a “pendulum” that has helped the industry continue to grow despite the turmoil at the start of the year.

But spending was largely concentrated on the major players in advertising, and more so than in previous years. The IAB said the top 10 companies held a 78.1% share of revenue in 2020, with overall revenue for that group alone exceeding $ 109 billion. The top 10 companies accounted for 75.9% of revenue in 2018, rising to 76.6% in 2019. The IAB said companies ranked 11th to 25th only accounted for 6.2% of revenue, while small businesses accounted for 15.7%.

The IAB doesn’t say how many of that is made up of companies like Facebook, Google, and Amazon. In one new report This week, eMarketer said Amazon’s share of the US digital advertising market was over 10% for the first time in 2020. Google’s share accounted for 28.9% of the US digital advertising market in 2020. and that of Facebook was 25.2%, according to eMarketer.

What was growing

Year-over-year growth declined 5.2% in the second quarter, according to the IAB report, but spending in the third and fourth quarters increased by 11.7% and 28.7 % year over year, respectively. The report says the fourth quarter of 2020 saw the highest revenue ever for digital advertising in more than 20 years, which it attributed in part to advertising leading up to the election. Advertisers were also spending 2020 budgets that had been put on hold earlier in the year due to the pandemic.

Social media ad revenue reached $ 41.5 billion in 2020, according to the report, accounting for nearly 30% of all internet ad revenue. Digital video grew 20.6% year-over-year, increasing its share of total internet advertising revenue by 1.3% to 18.7%.

Programmatic advertising revenue also rose 24.9% to $ 14.2 billion in 2020, but the IAB report questioned whether privacy changes such as Google deprecating third-party cookies would mean that growth will not be sustainable in the future.

“The changes in consumer identity and attribution models announced by Google and Apple have not had a material impact in 2020 and are expected to disrupt the tipping point as ecosystem participants and consumers are adapting to new models, ”the report says. “Rather than having a direct and significant impact immediately, the loss and blocking of identifiers on advertising products, tracking and other capabilities will be felt over time.”

Source link

About Abraham Vernon

Check Also

Billionaire green hydrogen tycoon focuses on low-cost perovskite solar power with plant cash injection

Fortescue Future Industries (FFI), the green hydrogen developer owned by Australian billionaire Andrew Forrest, has …

Leave a Reply

Your email address will not be published.