In 2021 the US saw exponential growth in digital advertising. The Internet Advertising Revenue report by IAB (Interactive Advertising Bureau) and PwC reveals that digital advertising in the US increased by 35.4% year on year to $189.3 billion in 2021. This growth is significant considering that it is the highest level of growth for the sector since 2006. Compared to 2020's 12.2% growth, the 2021's revenue growth for the industry is nearly three times greater and more than two times the growth between 2019 and 2018. As a result, revenues increased by $50 billion in just one year.
The assessment by IAB and PwC shows that every quarter of 2021 has been better for internet ad revenue than the previous year. The highest year-over-year growth occurred between Q2 2020 and Q2 2021, at 62.2 percent. This is consistent with Alphabet, Amazon, Meta platforms, Snap, and Twitter shattering Wall Street projections and earning record-breaking revenue in the second quarter, driven mainly by advertising.
Despite issues relating to privacy, measurement, the deprecation of identifiers, and the supply chain, all major digital channels recorded significant improvements. Social media increased 39.3% year over year to $57.7 billion. Search expanded "strongly" at 32.8 % YoY, although at a slower rate than other segments, resulting in a 0.8 % decline in its share of total revenue.
Mobile advertising revenue has broken the three-year trend of decelerated growth as it is surged by 37.4% to a total of $135 billion (13.4% growth in 2020 vs. 24.0% in 2019 vs. 40% growth in 2018). This is due to the proliferation of mobile video and gaming and the continued adoption of mobile e-commerce. But desktop vs. mobile ad dollars remained consistent, with 71.3% of overall ad revenue coming from mobile ads.
When it comes to advertising formats, digital video advertising garnered 51% revenue growth since 2020 at $ $39.5 billion totaled revenues in 2021. It now accounts for 20.9% of overall internet advertising revenue in 2021, up 2.2 percentage points from 2020.
The IAB and PwC estimate that momentum will continue in 2022 due to breakthroughs in retail media, linked TV, gaming, and experimentation in the metaverse and Web3.
In its forecast for the year 2022, this assessment addresses the industry's concerns due to tension and uncertainty surrounding privacy regulation, the deprecation of third-party cookies and identifiers, measurement, and supply chain transparency. However, with an optimistic approach, it states, "Nevertheless, brands have spoken, and digital is where they are putting their dollars. By continuing to focus on and invest in the areas needed to evolve the consumer value chain, the digital industry has the opportunity to tune established models from a position of financial strength and vibrant growth" Internet Advertising Revenue Report 2021(Full year), IAB and PwD.
"Nevertheless, brands have spoken, and digital is where they are putting their dollars. By continuing to focus on and invest in the areas needed to evolve the consumer value chain, the digital industry has the opportunity to tune established models from a position of financial strength and vibrant growth" Internet Advertising Revenue Report 2021(Full year), IAB and PwD.
The IAB commissioned and PwC Advisory Services LLC ("PwC") performed the "IAB Internet Advertising Revenue Report" on an ongoing basis, with data issued quarterly. The Interactive Advertising Bureau (IAB) began the "IAB Internet Advertising Revenue Report" in 1996. This research incorporates statistics and information provided to PwC directly by firms that offer online advertising and publicly accessible corporate data.