IAB: U.S. Digital Ad Revenue Grew 12.2% In 2020

Recently, the IAB released the 2020 digital advertising revenue report. Last year, digital advertising revenue in the United States reached $139.8 billion, an increase of 12.2%.

Among them, digital video advertising revenue has the fastest growth (20.6% year-on-year growth), with revenue reaching US$26.2 billion in 2020. Digital video's share of total digital advertising revenue increased 1.3% year over year to 18.7%.

Social media advertising revenue grew 16% in 2020 to $41.5 billion. Social media accounted for 29.6% of total digital advertising revenue, up 16.3% year-over-year.

Programmatic advertising revenue grew nearly 25% in 2020 to $14.2 billion as more marketers buy ads through automated transactions. However, the deprecation of third-party cookies and identifiers has many questioning the sustainability of this level of growth.

On a quarterly basis, advertising revenue in the second quarter dropped 5.2% year-on-year, but advertising revenue in the third quarter and fourth quarter achieved positive year-on-year growth of 11.7% and 28.7% respectively. Moreover, advertising revenue in the fourth quarter of 2020 was the highest revenue peak in 20 years.

CJ Bangah, principal at PricewaterhouseCoopers (PwC), said in an online presentation of the report: "The message is clear and unambiguous: the industry as a whole is growing. While the top ten companies by revenue continue to gain market share, the overall industry Participants appear to be benefiting from this growth."

Looking at the top ten companies by revenue, Google's advertising revenue fell for the first time in the second quarter, but revenue grew at record sales at the end of last year, with YouTube's revenue rising 46%; Facebook said its advertising revenue was higher than in 2019 In the same period last year, it increased by 21% to US$84.2 billion; and Amazon’s share of the US digital advertising market exceeded 10% for the first time.

Additionally, PwC's Bangah noted that while digital ad revenue on desktop computers exceeded $40 billion for the first time last year, mobile platforms are more powerful.

"There's no doubt that mobile is eating into the percentage of ad spend. With the innovation we're seeing in 5G, mobile's share is likely to rise," Bangah said.

Earlier this month, Magna described an optimistic outlook for the advertising industry in a forecast. U.S. advertising revenue is expected to grow 6.4% to $240 billion by 2021, according to Magna forecasts. Among them, digital advertising revenue is expected to grow by 13% to reach $161 billion, exceeding two-thirds of total advertising revenue for the first time.