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IABPwC US Social Media Ad Revenues 2012 2020 May2021While 2020 proved to be a less than stellar year for the offline advertising sector, the same cannot be said for digital advertising. A recent report from IAB and PwC shows that US digital advertising revenues still managed double-digit growth, experiencing a year-over-year (y-o-y) climb of 12.2% in 2020.

Despite this overall growth, 2020 did not start out looking hopeful. In fact, Q2 2020 saw digital advertising revenues drop by 5.2% y-o-y. It wasn’t until the second half of the year that the outlook became brighter. Q3 2020 saw digital ad revenues increase by 12.2% y-o-y, while revenues in Q4 grew by 28.7% over the same quarter in 2019.

Here are a few highlights from the report:

Social Media Advertising

The pandemic brought out several changes in consumer behavior, one of which has been increased use of social media. And, as adults turned more to social media, sometimes just to alleviate some of the stress of all that was going on, marketers were also increasing their spend in this area.

All told, social media advertising revenues in the US totaled $41.5 billion in 2020. This represents y-o-y growth of 16.3% from the $35.6 billion in spend in 2019, and continues the trend of increased social media advertising revenues in recent years.

The $41.5 billion in ad revenues represents 29.6% share of total digital ad revenues for the year. This share is only surpassed by search, which generated $59 billion in ad revenues and accounted for 42.2% of total digital ad revenue.

Digital Video Advertising

Although the growth of social media advertising revenues is noteworthy, it was digital video that saw the largest relative increase in revenue last year. Growing by 20.6% over 2019, digital video ad revenues accounted for 18.7% of total internet ad revenues.

Indeed, the $26.2 billion in revenue generated in 2020 is more than 2.5 times higher than $10.2 billion in ad revenues from digital video in 2018. Per the IAB and PwC’s data, the majority of digital video’s growth came from mobile, growing 25.3% y-o-y to account for $18.5 billion in spend.

While this growth in digital video advertising revenues is impressive, and industries like Retail, CPG and Financial Services are investing a fair share of their ad dollars in the channel, research from Xandr shows that only 1 in 5 video advertisers feel that they are currently very effective at reaching the right audience.

Programmatic Ad Revenues

Finally, ad revenues generated from programmatic grew by 24.9% over 2019. This growth is larger than the 20.7% y-o-y growth seen in 2019 and resulted in an additional $14.2 billion in revenues for the year.

That said, the report warns that programmatic may not be able to sustain this level of growth as the realities of a cookie-less world emerge.

You can read more here.

About the Data: Findings are based on IAB/PwC estimates.

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