IAB: US digital advertising soars 35% to $189 billion in 2021

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NEW YORK— Digital advertising set records in 2021 according to the new IAB Internet Advertising Revenue Report: Full Year 2021, produced by PwC. He revealed that total digital advertising in the US jumped 35% to $189 billion in 2021, the biggest increase since 2006.

The news was even better for digital video advertising, OTT, CTV and streaming companies, with digital video advertising being one of the fastest growing sectors, growing 50.8% in 2021 to reach 39 .5 billion dollars.

“We expected 2021 to be a bumper year for digital advertising growth, but even we were surprised at the degree of acceleration. Not only did all digital channels grow, but some grew by more than 50% year-over-year,” said Libby Morgan, senior vice president, chief strategy officer, IAB. “This year’s increase is 3x that of last year.”

This growth is in line with a recent study by Harvard Business School, commissioned by the IAB, which showed that the internet economy has grown seven times faster than the US economy over the past four years and now accounts for 12% of US GDP.

“What lies beneath these numbers is a very clear narrative. We are seeing the full and complete democratization of access offered by ad-supported digital channels,” said David Cohen, CEO of IAB. “Increased consumer use, coupled with the extraordinary growth of small and medium-sized businesses during the pandemic, has fueled the growth of all digital devices, but especially digital audio and video. We expect this digital migration to drive the continued growth of a healthy and competitive digital marketplace driven by innovation and entrepreneurship.

While the industry continues to face uncertainty surrounding privacy regulations, impairment of cookies and third-party identifiers, measurement challenges and supply chain transparency, the IAB and PwC anticipate a continued growth in digital advertising in 2022, driven by significant innovation in retail media, CTV/OTT, games and digital audio. The continued rise of AR/VR, Metaverse, and Web3 technologies is expected to drive innovation and continue to generate ad revenue in the years to come.

“According to the Census Bureau, 2021 saw the strongest business growth in history with 5.4 million new businesses created,” Cohen said. “These businesses rely on the ad-supported internet to attract new customers and provide products and services to the American public. We believe this small business engine will be a key contributor to fueling the continued growth of the ecosystem of digital media and marketing.

Other highlights of the 2021 results include:

  • Digital video continues to be one of the fastest growing channels, up 50.8% over last year, with total revenues of $39.5 billion.
  • Digital audio saw the strongest year-over-year growth, up 57.9% to $4.9 billion.
  • Social media advertising grew 39.3% to $57.7 billion as consumers continued to engage on Meta, Snapchat, TikTok and Twitter platforms.
  • Although research revenues increased significantly (32.8%) in 2021, they did not increase as strongly as in other areas, resulting in a slight decrease in the share of total revenues (reduction of 0.8 percentage points).

“The IAB Internet Advertising Revenue Report: Full Year 2021” can be downloaded here.

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