IAB: Digital ad spending to surpass broadcast TV revenue for the first time ever

For the first time ever, U.S. internet ad spending has surpassed broadcast TV revenue, according to the Interactive Advertising Bureau's annual report on digital advertising.

"The news that interactive has outperformed broadcast television should come as no surprise," said Randall Rothenberg, president-CEO of the IAB, in a statement. "It speaks to the power that digital screens have in reaching and engaging audiences."

U.S. digital ad revenue hit an all-time high of $42.8 billion last year, up 17 percent from 2012, the report said. That dollar amount exceeds what was spent on broadcast television advertising ($40.1 billion).  But before getting too excited, overall spending on TV still dwarfs mobile expenditures. Last year, TV raked in $66.35 billion, according to estimates from eMarketer.

IAB's report, which was prepared by PwC U.S., also revealed that fourth quarter revenues for 2013 reached $12.1 billion, up 17 percent compared to the year-earlier period.

One reason digital advertising performed so spectacularly well is because of the rise of mobile spending. For the third year in a row, mobile achieved triple-digit growth year-over-year, rising to $7.1 billion last year, an increase of 110 percent from 2012.

"Our survey confirms that we are fully in transition to the post-desktop era," said David Silverman, partner of PwC U.S. "Triple digit advertising revenue growth from mobile devices contrasted the more tepid 8 percent growth from traditional computer screens. This is simply a reflection of the change in how and where consumers are viewing their information—on the go!"

Mobile is doing so well that it is catching up to display. Last year, mobile accounted for 17 percent of revenues, just two percentage points behind display, which totaled $12.8 billion. In 2012, mobile represented 9 percent of revenues, while display captured 21 percent.

Another channel growing like gangbusters is digital video, the IAB said. A component of display-related advertising, the channel took in $2.8 billion last year, up 19 percent over 2012. As a result, it became the fourth largest format, directly behind mobile.

Even though spending on those new kids on the block is rising fast, search is still the largest single category of ad spending. The channel brought in $18.4 billion last year, up 9 percent from 2012, and accounted for almost half of all spending (43 percent).

For more:
-See the IAB report

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