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Digital advertising surpassed TV ads in 2016

Digital advertising surpassed TV ads in 2016

Television has finally been ousted by smaller and smarter screens. Digital advertising jumped 22 percent in 2016, beating the TV market for the first time.

Last year marked a couple of firsts for the media industry. In 2016, digital advertising became a larger business than television advertising and mobile accounted for more than half of all digital spend in the United States, according to a new report from PricewaterhouseCoopers in partnership with the Interactive Advertising Bureau.

Digital advertising revenue jumped nearly 22 percent to $72.5 billion in 2016, marking eight consecutive years of record-breaking gains. According to eMarketer, TV ads brought in $71.3 billion in U.S. revenues last year. And the trend is likely to continue, with eMarketer estimating that the digital ad market will grow by 15.9 percent to $83 billion in 2017.

The sustained growth in digital ad spending is also empowering Google and Facebook to deepen their duopoly over the market. Google is on track to end 2017 with 40.7 percent of the digital ad market in the U.S., while Facebook grows to 19.7 percent.

Mobile gains

Mobile advertising increased 77 percent to $36.6 billion last year, capturing more than half of all digital spending in the U.S. for the first time. “Mobile fueled the internet economy in 2016, with advertisers showing their confidence in digital to achieve their marketing goals,” IAB President and CEO Randall Rothenberg wrote in a prepared statement. “This increasing commitment is a reflection of brands’ ongoing market shift from ‘mobile-first’ to ‘mobile-only’ in order to keep pace with today’s on-the-go consumers.”

About 47 percent, or $17.2 billion, of all mobile ad revenue was attributed to search in 2016, while desktop search revenues declined for the first time last year, down 13 percent year-over-year to $17.8 billion, according to IAB.

More notable numbers

  • Social media advertising climbed almost 50 percent to $16.3 billion.
  • Mobile video ads were the fastest growing digital format in 2016, gaining 145 percent year-over-year to almost $4.2 billion.
  • Digital video ads rose 53 percent to $9.1 billion in 2016, according to the report.

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