Digital ad spend in the United States reached a record high of $17.6 billion (£14.4 billion) during the third quarter of 2016, according to the latest Internet Advertising Revenue Report published by IAB. The trade organisation said that the new figure represents a 20 per cent increase compared to the same three-month period in 2015.
While the $17.6 billion ad investment is not an overall record, it is the highest recorded digital advertising spend for the months between July and September. It also reflects a healthy 4.3 per cent sequential increase on the second quarter of 2016, which was driven by the rise of formats such as digital video.
“The momentum of advertising in mobile, digital video, and other innovative formats is undeniable,” IAB Executive Vice President and CMO David Doty said. “These record-setting third quarter revenue figures reflect marketers’ trust in the Internet’s power to connect with today’s audiences.”
David Silverman, PwC US partner, added: “Digital has become a critical part of advertisers’ marketing strategies. Increasing media consumption on interactive screens will surely lead to even more investment in the digital landscape.”
Ad revenue growth
IAB also published figures for ad format spending for the first half of 2016. Search represented 50 per cent of investment between January and June, placing it ahead of display (31 per cent), video (12 per cent) and other (eight per cent).
Mobile ad spending also soared during this period and is now responsible for almost half of total Internet ad revenues for the first half of the calendar year, which is a 30 per cent rise year-on-year. Research by eMarketer predicts that digital advertising will finally surpass TV ad spend by the end of 2016.
However, despite the rosy outlook, there are problems that could have an impact on the growth of digital ads. According to a study by the ANA and WhiteOps, digital ad fraud is becoming more prevalent, and advertisers across the globe are estimated to have wasted around $7 billion (£5.7 billion) this year due to bots. Issues with metrics and measurements and ad blocking have also contributed to a loss of confidence amongst some agencies and advertisers.
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