Internet Ad Revenues Post Huge Gains

While ad tech companies themselves are still merging and their IPOS may not be doing too well, the industry they enable is doing just fine. PwC US has just released its latest half year study of Internet ad revenues, an they’ve hit yet another new high, now at $23.1 billion. That’s up 15% from last year’s first half., which was $20.1 billion.  IAB released the study at the beginning of Q4, traditionally a strong time for advertising revenues. That means Q4 will probably beat Q2’s $11.7 billion.

Realistically, there’s nowhere to go but up, because mobile revenues alone have increased 76%, and they’re just beginning to take off. They’re at $5.3 billion now, and that’s before advertisers really develop mobile strategies and figure out how to measure their results. Another promising sign is the recent shift of TV dollars to video. Right now, that shift looks like a cross-channel or cross-platform strategy, but it will change further as large networks unbundle from the cable providers and become apps, with their own strategies for attracting those elusive cord-cutters. Or in the case of Millennials, people who never even had a cord to cut.

So we predict that 2015 will be the year of  “Mobile. Digital. Video.”

And a recent AOL Platforms study seems to agree with us, citing the following trends:

  • VIDEO AD GROWTH IS IMPOSSIBLE TO IGNORE.
    Advertising spending on online video increased for the 5th consecutive year, and buyers claim spending will grow across the board in 2015. Publishers are reaping the benefits of diversified selling channels, inclusive of programmatic.
  • DRAMATIC SPENDING SHIFTS FUEL THE DIGITAL VIDEO REVOLUTION.
    Agencies and brands are increasingly tapping into broadcast and cable TV budgets to fund their digital video ad spending.
  • PROGRAMMATIC IS OVERTAKING PUBLISHER-DIRECT BUYS.
    Brands and agencies are moving away from buying direct from publishers and ad networks, in favor of buying through exchanges and DSPs. With 60 percent of their budgets going to programmatic channels, brand advertisers are most aggressive with their spend reallocation.
  • DATA-DRIVEN, PROGRAMMATIC TV HAS ARRIVED.
    Video buyers are already running data-driven TV campaigns, evidenced by the 40 percent of brands adopting the practice. Brand budgets for programmatic TV buying are predominantly coming from traditional TV spending, not from digital or incremental spending.
  • VIEWABILITY VEXES BOTH BUYERS AND PUBLISHERS.
    Brand buyers and sellers cited ad viewability as the most problematic issue for them, compared to verification/placement and bot fraud, which ranked lower. Only 25 percent said they are up to speed on these issues, indicating a need for additional education.

A key driver of the mobile video revolution is social media revenues, which includes advertising delivered on social platforms, including social networking  and social gaming websites and apps. Advertising on social media sites and within gaming apps and platforms increased 58% over last year, and will continue to rise.

Interestingly, search advertising is underperforming growth in the rest of the Internet advertising business, perhaps because it is the most mature category of online advertising and also the least interactive. Still, it’s a pretty encouraging set of reports to take us through Q4.