IAB: Mobile made up nearly half of $32.7 billion record internet revenues in first half of 2016

Internet revenues surpassed another record high in the first half of 2016 to hit $32.7 billion, according to the IAB report conducted by PwC. That’s a 19-percent increase over the $27.5 billion reported for the first half of 2015. Digital growth is outpacing other media when compared to Nielsen data, thanks to mobile.

Mobile ad revenues jumped 89 percent year over year to $15.5 billion in the first half of 2016. Mobile represented 47 percent of all internet ad revenues, up from 30 percent a year ago. Mobile growth has consistently been in double digits since 2012 and has seen increases across all formats this year:

• Mobile search revenues increased 105 percent to 7.4 billion.
• Mobile video rose 178 percent to 1.6 billion.
• Mobile display banner ad revenue rose 62 percent to 6 billion. 

Search continued to account for 50 percent of all internet ad revenues across mobile and desktop. Search revenues reached $16.3 billion in the first half of the year across mobile and desktop, an increase of 19 percent year over year. Video’s share of ad revenues grew from 9 percent to 12 percent year over year.

The report does not break out social as a percentage of mobile, but PwC says social media was a key driver of growth for mobile video and banner, accounting for nearly 100 percent of non-search growth in the industry. Social media ad revenues hit $7 billion in the first half of the year, up 57 percent year over year. Total social media revenue, including both mobile and desktop, has increased over 50 percent every half-year since 2012.

The IAB Internet Advertising Revenue Report is prepared by PwC US. “These numbers demonstrate the growing importance of mobile, showing us the increasing demand for digital video and search, available anytime, anywhere, in the palm of your hand,” said David Silverman, a partner at PwC US.

Display ad CPMs increased about three percent in first half of 2016. In-stream video CPMs were down two percent but continue to remain much higher than display. Two-thirds of digital advertising is sold on a performance basis and one-third on a CPM basis.

The core portion of the survey conducted by PwC comes from companies selling ads and is supplemented with public information. PwC does not release any information about which companies participate but noted that the concentration of revenues continues to be dominated by a small number of companies. Ten companies generated 74 percent of digital advertising revenues in the first half of the year. The next 15 companies made up 10 percent of revenues. (The report does not mention or break out Google and Facebook, but these two companies, of course, overwhelmingly underpin the growth story.)

On a quarterly basis, Q2 ad revenues increased 18 percent to $16.9 billion, up from $14.3 billion in Q2 2015. The full report is available here.

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About The Author

As Third Door Media’s paid media reporter, Ginny Marvin writes about paid online marketing topics including paid search, paid social, display and retargeting for Search Engine Land and Marketing Land. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions. She provides search marketing and demand generation advice for ecommerce companies and can be found on Twitter as @ginnymarvin.

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