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Mobile?s 66pc revenue jump drives stellar year for Internet advertising: IAB

With a 66 percent jump in mobile revenue in 2015, the segment outshone other areas of Internet advertising as marketers looked to reach consumers where they are spending time ? on their phones, according to a new report from the Interactive Advertising Bureau. 

The full-year IAB Internet Advertising Revenue Report, which was prepared by PwC US, shows that the overall industry experienced a 20 percent increase for a total of $59.6 billion. Social media advertising also grew significantly, although off a smaller base, and was up 55 percent in 2015 for a total of $10.9 billion. 

?One of the key things in the growth of this industry has been innovation,? said David Silverman, a partner at PwC, during a conference call to discuss the report. ?Throughout the beginning with the simple banner ad saying ?click here,? to the evolution into search and more recent mobile and video, it continues to evolve and increase the capacity for what it can do and reach a broader audience. 

?Over the past six years, we?ve seen how mobile has continued to drive the growth of the industry,? he said. ?Mobile, over that six year period, had a one hundred percent compounded annual growth rate. Non-mobile, so the desktop, had a nine percent growth rate. 

?When you think about the shift in eyeballs going to mobile, the fact that it had a nine percent growth rate that far outpaced traditional media, it really is phenomenal, given that people are now dividing their time between mobile devices and the desktop.?

Share of market
The significant growth in mobile, which encompasses mobile search, video and display for the purposes of the IAB report, underscores how important it is becoming to marketers. 

Mobile?s strong growth is impacting the relative breakdown of Internet advertising segments by share of market. 

Mobile accounted for 35 percent of the industry spend in 2015, up from 25 percent in 2014. Search dropped to 34 percent from 38 percent a year earlier, pointing to how more search is moving to mobile. Banner ads dropped to 13 percent from 16 percent in 2014, reflecting how, as mobile grows, marketers are looking for formats that are better suited for small screens. 

Digital video commercials remained even at seven percent, classified were unchanged at five percent, lead generation dropped one point to three percent, sponsorships dropped one point to one percent and display-related rich media dropped one point to two percent. 

Retailers are big spenders
Non-mobile digital video grew 30 percent for a total of $4.2 billion while non-mobile search grew 8 percent for a total of $20.5 billion. Display-related advertising was up three percent for a total of $13.9 billion. 

Retailers continued to represent the largest category of Internet ad spending, responsible for 22 percent. Automotive and financial service, the next biggest spenders, accounted for 13 percent of the year?s revenues. 

?Over the last four years, social has had a compound annual growth rate of 55 percent at 10.8 billion dollars total in the current year, which represented 18 percent of total advertising revenue for the year, which is up from 14 percent in the prior year,? Mr. Silverman said. ?In Q4, that percentage actually increased to 21 percent. 

?So social media continues to make up an extremely large component of the ad mix in the industry,? he said. ?In fact, almost forty percent of 2015?s increase from 2014 came from the increase in social media.?