According to an annual report by the Interactive Advertising Bureau (IAB), revenue from online advertising surpassed broadcast television advertising for the first time in 2013. But it still fell far below revenue from broadcast and cable television ads combined, which dwarf online ads by more than $20 billion.
According to Randall Rothenberg, President and CEO of IAB, the surges in online advertising are not unexpected:
The news that interactive has outperformed broadcast television should come as no surprise. It speaks to the power that digital screens have in reaching and engaging audiences. In that same vein, the triple-digit growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers' lives throughout the day, as well as their critical importance to cross-screen experiences.
The report finds that online ad revenue jumped by 17 percent in 2013, rising to $42.8 billion from $36.57 billion. Revenue from mobile advertising more than doubled, rising 110 percent from $3.4 billion in 2012 to $7.1 billion in 2013. According to David Silverman, a partner at PriceWaterhouseCoopers, which keeps tabs on the data, this is yet another sign that mobile is replacing desktop. Per Silverman, “Our survey confirms that we are fully in transition to the post-desktop era. Triple-digit advertising revenue growth from mobile devices contrasted the more tepid 8% growth from traditional computer screens."
In 2013, nearly half (43 percent) of ad revenues came from search, which include paid listings for ads to pop up when key phrases are typed into search engines, site optimization and others, and about 19 percent came from display banners. Only about 17 percent came from mobile — but this was still a huge jump from 2012, when mobile ads accounted for only nine percent. Roughly one-fifth of the companies that reported online ad revenues are retailers. About 13 percent deal in financial services, 12 percent are automakers and about 12 percent are automakers.
Still, it seems some traditional forms of advertising aren't going anywhere. According to USA Today, the cost of a Super Bowl television ad has been steadily rising. And it's unclear how companies like Facebook will roll out video advertisements, which are both expensive and likely to prompt backlash from frustrated users. There's no doubt that the power of a single well-placed TV ad far outweighs any online ad (and is also a lot more expensive.) But either way, we should all expect a lot more mobile ads in the next few years.