IAB: First half 2017 ad revenues reach $40.1 billion, on track for $87 billion for the full year

The Interactive Advertising Bureau just released its first half 2017 digital advertising revenue report. Revenues reached a record $40.1 billion, compared with $32.7 billion a year ago. In the second quarter, they were $20.8 billion.

Revenues were almost equally divided in Q1 and Q2. Year-over-year quarterly growth was 23 percent, while sequential growth was 7.4 percent this year.

Mobile advertising represented 54 percent of the revenue total in the first half ($21.7 billion). Mobile ad revenues grew at a more than 75 percent compound annual growth rate, compared to a much smaller desktop growth rate.

The Growth of Mobile Ads

The following are ad revenues by category for the first half:

• Search: $19.1 billion (vs. $16.2 billion in 2016)
• Video: $5.2 billion (vs. $1.4 billion)
• Display $17.6 billion (vs. $13.7 billion)
• Other (classifieds, lead-gen, audio): $3.4 billion

These figures exceed $40.1 because categories overlap (i.e., video is counted both on its own and as part of display). The graphic below shows the percentage breakdown by format for the first half of 2016 and 2017.

Digital Ad Revenue First Six Months of 2017 (desktop + mobile)

Search remained the dominant ad format overall at 47 percent of the total (50 percent for the desktop). However, the combination of “banner” and video represented 44 percent of total revenue. The IAB said that social-media ad revenue (mobile and desktop) generated $9.5 billion in the first half vs. $7 billion a year ago. The IAB also reported that mobile and desktop video were exactly even at $2.6 billion ($5.2 billion total).

Online advertising revenue was concentrated in the top 10 companies, which together captured 75 percent of total digital ad revenue, largely unchanged from last year. Historical revenue trends suggest that full-year 2017 digital ad revenues may reach $87 billion vs. $72.5 billion in 2016.