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The Internet Advertising Revenue Report – $189 Billion In 2021

The Internet Advertising Revenue Report – $189 Billion In 2021

Highest increase in revenue since 2006; revenue from digital advertising jumped by 50 billion in a single year.

Advertising dollars are shifting to digital media—no surprise there!

But even we were shocked to learn that, according to the newly released “IAB Internet Advertising Revenue Report: Full Year 2021,” conducted by PwC, all major channels increased significantly compared with a year ago, particularly across digital video (including CTV/OTT), digital audio, social media, and search.

And as if on cue, mobile and desktop display ad impressions also increased in 2021, with the former contributing $45 billion in net revenue and the latter contributing $22.1 billion.

“We fully expected 2021 to be an exceptional year for digital ad growth, but even we were surprised at the degree of acceleration. Not only was every single digital channel up, but some were up more than 50% year on year,” said Libby Morgan, SVP, Chief Strategy Officer, IAB. “This year’s increase is 3x what it was last year.”

The annual growth numbers are consistent with a recent study from Harvard Business School, commissioned by the IAB, that showed the internet economy has grown seven times faster than the U.S. economy over the past four years and now accounts for 12 percent of the U.S. GDP.

“What’s underneath these numbers is a very clear narrative. We are witnessing the total and complete democratization of access afforded by ad-supported digital channels,” said David Cohen, Chief Executive Officer, IAB. “Increased consumer usage coupled with extraordinary growth of small and mid-sized businesses during the pandemic has fueled growth across all digital — but especially digital audio and video. We expect this digital migration to drive the continued growth of a healthy and competitive digital marketplace driven by innovation and entrepreneurship.”

Other highlights from the report include:

  • Digital video continues to be one of the fastest growing channels, up 50.8% compared to last year, with total revenues of $39.5B.
  • Digital audio captured the highest YoY growth, up 57.9% to $4.9B.
  • Social media advertising was up 39.3% to $57.7 billion, as consumers continue to engage with Meta platforms, Snapchat, TikTok, and Twitter.
  • While search revenue grew substantially (32.8%) in 2021, it did not grow as strong as other areas, leading to a slight decrease in total revenue share (reduction of 0.8 percentage points).

What trends will shape digital advertising in 2022?

As we move through the remainder of 2022, digital advertising will continue to grow. Look for innovations in retail media, CTV/OTT, gaming, and digital audio. The continued rise of AR/VR, the metaverse, and Web3 technologies is expected to spark innovation — and drive ad revenue in the years ahead.