#11 M&E Research : Online Ad Revenues races past Broadcast TV in standalone revenue terms

Advertising world is getting accustomed to the new world order with Online aggressively leading the pack of media advertising mediums. Riding on double and triple digit growth in internet and Mobile, Online advertising has surpassed broadcast television advertising revenues (national networks, syndication and spot TV). It achieved a similar milestone few years back in 2011 when it surpassed Cable TV ad revenues. With aggregate revenue of $42.8 billion in 2013, Online advertising stands ahead of the half way mark at 57% of entire TV industry (Broadcast and Cable) ad revenues. This success marks the dominance of Online advertising and the tough competition which lies ahead for the entire TV industry to capture the ad dollars.

Interactive Advertising Bureau (IAB) which recently released the Internet Advertising revenue report reveals the growth trend in online advertising with a revenue increase by 17% in 2013 over 2012’s figure of of $36.6 billion. The report highlights growing impact of audiences exposure to multiple screens, especially mobile with its incremental power to follow, track, reach and engage with audiences like never before. A fact boldly represented by 123% CAGR ad revenue growth from mobile devices. Key highlights from the report include

• For three years in a row, mobile has achieved triple-digit growth on Y-O-Y basis, rising to $7.1 billion during 2013, a 110 percent rise from the previous year’s  $3.4 billion. Mobile revenue also jumped to 17 % from 9 % in 2012.
• Display-related advertising for digital video brought in $2.8 billion in 2013, up 19 % from $2.3 billion in 2012.
• Search revenues totaled $18.4 billion in 2013, representing 43% of FY 2013 revenues and up 9 % from 2012 figure of $16.9 billion
• Display-related advertising revenues in 2013 totaled $12.8 billion, a rise of 7 % over $12 billion in 2012.
• Retail advertisers represent largest category of internet ad spenders, representing 21% share followed by financial services at 13% and closely trailed by automotive at 12%.
• Search retains the leading format for revenue contribution, representing larger share then combined Display and Mobile at second and third positions.
• Trends in pricing models – performance based and CPM have largely remained flat with a percentage gain in CPM model at 33% and a percentage decline in performance based at 65%

Full report from IAB is available here