• by Joe Mandese  @mp_joemandese, April 16, 2024

In what could be a leading indicator of a digital ad-spending expansion, the second half of 2023 grew at more than twice the rate as the first half, according to just-released figures from the Interactive Advertising Bureau (IAB) and PwC's full-year 2023 Internet Advertising Revenue Report.

For the full year, digital ad spending expanded 7.3% over 2022 -- the lowest rate in recent years (see chart above) -- due to a relative market slowdown, especially among big digital advertising suppliers.

But the second half grew 10.8%, compared with only 3.5% for the first half. And the fourth quarter grew the most -- 12.3% vs. the fourth quarter of 2022.

“Despite inflation fears, interest rates at record highs, and continuing global unrest, the U.S. digital advertising industry continued its growth trajectory in 2023,” IAB CEO David Cohen said in a statement, adding: “With significant industry transformation unfolding right before our eyes, we believe that those channels with a portfolio of privacy by design solutions will continue to outpace the market. For 2023, the winners were retail media, CTV, and audio which saw the highest growth.”

Not surprisingly, retail media was among the fastest-growing sectors, rising 16.3% to $43.7 billion in 2023.

Video advertising revenue experienced double-digit (10.6%) growth, rising to $52.1 billion in 2023.

Significantly, the report notes that 42% of the video advertising revenue was generated by the burgeoning CTV (connected TV) and OTT (over-the-top/streaming) categories, an important bellwether heading into the 2024-35 upfront and newfront media-buying season.