• by Jack Loechner , Staff Writer, April 23, 2014

Randall Rothenberg, President and CEO, IAB says “The news that interactive has outperformed broadcast television… speaks to the power that digital screens have in reaching and engaging audiences… triple-digit growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers' lives… as well as their critical importance to cross-screen experiences...”

A new study by the IAB, with Price Waterhouse Coopers, wraps up the 2013 full year Internet advertising results report, noting that Internet advertising revenues in the United States totaled $42.8 billion for the full year of 2013, with Q4 2013 accounting for approximately $12.1 billion and Q3 2013 accounting for approximately $10.6 billion. Revenues for the full year of 2013 increased 17% over 2012. Mobile advertising in the United States totaled $7.1 billion during FY 2013, a 110% increase from the prior year total of $3.4 billion.

David Silverman, Partner, PwC, concludes that “… (the) survey confirms that we are fully in transition to the post-desktop era… triple-digit advertising revenue growth from mobile devices contrasted the… (only) 8% growth from traditional computer screens… the change in how and where consumers are viewing their information -- on the go!”

2013 annual revenues increased on a year-over-year percentage and dollar basis. The compound annual growth rate (CAGR) over the past ten years for internet advertising of 18% has outpaced U.S. current dollar GDP growth of 4% over that period. Since 2010, Internet advertising growth was fueled by a 123% CAGR in Mobile (compared to 12% growth in non-Mobile revenue).

Second-half revenues totaled $22.7 billion in 2013, an increase of $3.2 billion from second-half revenues of 2012, which totaled $19.5 billion. Second-half revenues in 2013 represented 53% of total revenues in 2013, consistent with numbers reported in 2012 and consistent with the broader trend of higher revenues in the second-half of each year.

Online advertising continues to remain concentrated with the 10 leading ad-selling companies, which accounted for 71% of total revenues in Q4 2013, down slightly from the 72% reported in Q4 2012. Companies ranked 11th to 25th accounted for 10% of revenues in Q4 2013, consistent with the 10% reported in Q4 2012.

Search continues to lead ad formats; Digital video increases share to become fourth largest format; Ad format – full year 2013 results

• Search revenues accounted for 43% of FY 2013 revenues. Search revenues totaled $18.4 billion in FY 2013, up 9% from FY 2012
• Display-related advertising accounted for $12.8 billion or 30% of total revenues during FY 2013, up 7% reported in FY 2012. Display-related advertising includes Display/Banner Ads (19% of FY 2013 revenues), Digital Video ($2.8 billion), Rich Media (3%), and Sponsorship (2%)
• Mobile revenues totaled 17% of FY 2013 revenues, or $7.1 billion, up 110% from the $3.4 billion reported in FY 2012
• Classifieds revenues totaled $2.6 billion or 6% of FY 2013 revenues, up 7% from the $2.4 billion reported in FY 2012
• Lead Generation revenues accounted for 4% of FY 2013 revenues, or $1.75 billion, up 4% from the $1.69 billion (5% of total) reported in FY 2012

Historical format trends; Search retains largest share of revenue, while Mobile grows fastest

• Search remains the leading format, representing a larger amount of the share than the next two closest formats combined (Display and Mobile). Decline in its overall share is attributed to growth in Mobile and Mobile Search, which is included in the Mobile category
• All formats other than Digital Video and Rich Media are down slightly as a percentage of total revenue due to the substantial growth of Mobile
• Mobile revenues continued to quickly gain share, representing 17% of total revenues in FY 2013, as compared with 9% reported in FY 2012 and 5% in FY 2011. While Mobile has eroded share of other formats, the Mobile format itself is comprised of multiple formats.

Ad revenues by industry category; Retail drives advertising, as dollars shift to digital (vs.2012)

• Retail advertisers continue to represent the largest category of Internet ad spending, accounting for 21% of total revenues in 2013, up 20%
• Financial Services advertisers accounted for 13% of revenues in 2013, even with 2012
• Automotive advertisers accounted for 12% of revenues in FY 2013, even with 2012
• Telecom companies accounted for 9% of revenues in FY 2013, down 11%
• Leisure Travel (airfare, hotels, and resorts) accounted for 8% of revenues in FY 2013, down from 9%
• Consumer Packaged Goods represented 7% in FY 2013, even with 2012
• Computing products advertisers represented 6% of revenues in FY 2013, down from 8% in 2012
• Pharmaceutical/Healthcare accounted for 5% in FY 2013, down from 6% in 2012
• Media accounted for 5% in FY 2013, even with 2012
• Entertainment accounted for 4% of FY 2013 revenues, even with 4% in 2012

Advertising market share by media; Internet advertising surpassed Broadcast Television advertising revenue in 2013

Internet has continued to grow in share and significance and now represents 57% of all Television (Broadcast and Cable) advertising.

• In 2013, Internet advertising exceeded Broadcast Television
• In 2011, Internet advertising surpassed Cable Television

For additional information, please visit IAB here.