(Credit image/Pixabay/Annalise Art)As the world grapples with the ongoing ramifications of the COVID-19 pandemic, the digital advertising sector continues to show resilience. According to the “IAB Internet Advertising Revenue Report,” digital advertising revenues increased by 12.2% in 2020 compared to 2019. The report uses data and information reported directly to PwC Advisory Services from companies selling advertising on the internet. In addition to publicly available corporate data.

The second half of 2020 made up for the rather abrupt drop in advertising revenue. This was experienced toward the end of the second quarter,” said Susan Hogan, Senior Vice President, Research and Analytics, IAB. “We not only had a rebound, we also had double-digit growth. The Q4 holiday season sales, typical use-it-or-lose-it year-end spending of media budgets. In addition to revenue from political advertising all helped to offset the early Covid-19-induced decline.

Susan Hogan, Senior Vice President, Research and Analytics, IAB

Hogan continued, “The surge in consumer adoption of Connected TV, eCommerce shopping, and at-home deliveries created the pendulum swing needed for digital media to continue growing. These are just some of the factors that contributed to ad dollars moving from traditional media to digital media.”

Q4 2020 provides optimism for the future

Although Q2, year-over-year growth declined by 5.2%, revenues in Q3 and Q4 more than balanced the scales. They returned positive year-over-year growth of 11.7% and 28.7%, respectively. In fact, Q4 2020 had the highest revenue on record for digital advertising in more than 20 years. The increase in Q4 can be attributed to a number of factors. This included both advertising dollars flooding into the market for the election. In addition, the need to spend 2020 budgets paused during the first half of the year because of the pandemic.

Video and social media vs linear TV

Video and social media experienced the largest increases year-over-year, taking share from linear TV. Seemingly pandemic proof, social media advertising revenues reached $41.5 billion in 2020. That 16.3% year-over-year growth attributes social media with nearly 30% of all internet advertising revenue (29.6%).

Digital video experienced the greatest increase (20.6% year-over-year) in advertising revenue growth, generating $26.2 billion in 2020. Digital video increased its share of total internet ad revenue by 1.3% year-over-year, reaching 18.7%.
Programmatic revenue grew by nearly 25%

Programmatic advertising revenues increased by $14.2 billion in 2020 (+24.9%). However, the deprecation of 3rd party cookies and identifiers leave many to wonder if this level of growth is sustainable.

We expected programmatic growth in double digits. Advertisers are using automated buying for more formats now, including CTV. The fact is Q2 2020 saw a shift from performance to mission-based messaging due to COVID-19. This has accelerated the speed of programmatic adoption for agencies and brands,” said Hogan. “However, there is some concern that programmatic delivery could be negatively impacted once 3rd party tracking is blocked.

Enterprise Times: What this means for business?

The digital advertising sector continues to show resilience despite the ongoing drama of the COVID-19 pandemic. This report is a useful planning tool to understand the insights behind last year’s digital marketing trends and the outlook for 2021/2022. The fact is Q2 2020 saw a shift from performance to mission-based messaging due to COVID-19 is significant. This has accelerated the speed of programmatic adoption for agencies and brands. However, it was also noted that programmatic delivery could be negatively impacted once 3rd party tracking is blocked. Businesses, dependant on internet and social media advertising will have to pay particular attention to the type of online advertising they use going forward.

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