Revenue from third-party audience measurement companies supporting entertainment and Internet advertising will grow by 25% during the next three years, reaching approximately $3.3 billion in 2018, according to a report from Needham & Co. Analyst Laura Martin.
With U.S. online ad growth coming mostly from new devices, "this implies growing complexity for ad agencies, brands and publishers," per the report. "More complexity drives demand for new measurement products. Digital ad buys are typically targeted, so adding products that track gross impressions across all screens and then de-duplicating the audience represents measurement revenue upside."
Martin also points to several key trends across the industry, such as how mobile continues to save U.S. Internet advertising from slumping into the red. She explains that U.S. Internet ad revenue growth fell 140 basis points to 15.6% in 2014, down from 17.0% growth in 2013. Last year, non-mobile Internet advertising growth slowed to 4% in the U.S. to $37 billion including search, down from 8% growth in 2013, and down from 10% growth in 2012.
The numbers suggest it's safe to assume most Internet ad growth in the U.S. comes from mobile devices. Purchases made on mobile devices continue to grow. The report notes that of total e-commerce of $72 billion in 1Q 2015, 15% took place on mobile devices. Mobile commerce grew 52% from $7.3 billion in 1Q 2014 to $11.1 billion in 1Q 2015.
While online advertising is a global business, the U.S. leads the rest of the world. Focusing on shifts in the U.S. often provides insights about future global trends, according to the report.
Some U.S. Internet advertising key channels are growing, while others are stagnant. Search grew by 7% in 2014, representing the majority of online advertising revenue in the U.S., about $19.6 billion or 40% of the total. Display revenue was nearly flat at $12.1 billion, or 24% of total. Online video revenue grew 18% in 2014, which is relatively weak considering the market share at $3.3 billion.