Data Scout is LSA’s series that curates and draws meaning from third-party data. Running semi-weekly, it adds an analytical layer to the industry data that we encounter in daily knowledge building. For LSA original data, see the separate Modern Commerce Monitor™️ series.
U.S. digital advertising reached $57.9 billion in the first half of 2019, $30.9 percent of which was mobile ads. This is according to the Interactive Advertising Bureau’s latest industry audit, done in tandem with PwC, otherwise known by analysts and market-sizing pros as the IAB “actuals.”
As quick background on that, there are several inputs involved in market sizing and forecasting, including “bottom-up” assessments of individual company revenues (e.g. Google, Facebook, etc.). There’s also top-down analysis such as macro factors, industry growth patterns and share of GDP.
One of those inputs — sometimes as an after the fact gut check — is these IAB actuals. They look retrospectively at U.S. ad spending based on the audit methodology of PwC. This can help, along with several other market signals, to benchmark past forecasting and calibrate future numbers.
What else do the figures indicate? Overall U.S. digital advertising is up 17 percent year over year. However, when looking at period-over-period growth (comparing to 2H 2018), spending dipped slightly. This could indicate that digital marketing is decelerating from its post-2009 growth tear.
However, the dip was so low that IAB SVP research and analytics Sue Hogan calls it “a rounding error.” This would make the period-over-period growth flat which still isn’t good news, considering it’s a slowdown from so many consecutive quarters of growth in digital advertising.
PwC’s David Silverman noted to press that this deceleration could be due to the maturation of the segments that have erstwhile driven growth — namely mobile and social. Mobile ad spending was up 29 percent while social was up 26 percent, but these are growth rates are themselves declining.
As for bright spots, video advertising is up 36 percent to $57.9 billion, a growth rate which doesn’t appear to be decelerating the way that mobile and social are. Meanwhile, revenue concentration continues (a la duopoly) with the top-10 ad revenue companies taking 76 percent of the market.
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