Digital Audio Revenue Grew 13% In 2020 Says IAB; Second Half ‘Wildly Different’ Ad Market.


Digital audio advertising revenue grew by more than $350 million in 2020 according to the Internet Advertising Bureau which has released its annual ad revenue report. It said total digital audio ad revenue increased 13% to $3.085 billion. The tally includes streaming radio, podcasting and music services. The IAB said mobile remains the dominant ad-revenue generating device for audio, with eight of every ten dollars attributed to mobile devices. The data, which was compiled by PwC, showed mobile audio revenue grew at a faster 15% rate last year.


PwC Principal C.J. Bangah, who leads its Technology, Media and Telecom Group, said digital audio was one of the media formats that benefited from the same shifts in consumer behaviors that have made digital video one of media’s winners. “Desktop and mobile were both growing, with mobile growing at a faster rate,” she said during an IAB webinar Wednesday.


The IAB said overall internet advertising revenue grew to $139.8 billion in 2020, a 12.2% increase over 2019. That was a slightly smaller increase than the 15.9% gain recorded in the prior year.


But a quarter-by-quarter analysis shows, because of the coronavirus pandemic, the first and second halves of the year were quite different. With many states issuing stay-at-home orders at the end of first quarter, and U.S. GDP falling sharply, the IAB says it is not surprising that second quarter took the biggest hit in revenue last year with digital ad revenues declining 5.2%.


“We saw advertisers become much more cautious about the placement of their advertising – and they reduced spend in certain locations,” said Susan Hogan, Senior VP of Research and Analytics at the IAB. But the second half made up for the abrupt drop in advertising revenue. “First half was wildly different than the second half,” she said.


The IAB reports digital advertising rebounded with third quarter revenue up 11.7% from a year earlier and fourth quarter growing 28.7%. In fact, Q4 2020 had the highest revenue on record for digital advertising in more than two decades of IAB tracking. And the second half of 2020 had more revenue than all of 2016.


“We not only had a rebound, we also had double-digit growth,” said Hogan. “The Q4 holiday season sales, typical use-it-or-lose-it year-end spending of media budgets, and revenue from political advertising all helped to offset the early Covid-19-induced decline.”


PwC says internet advertising’s 12.2% growth rate last year stands in stark contrast to most other media. “As consumers increasingly engage with digital experiences, digital devices, and digitally-enabled experiences, the advertising dollars are absolutely following,” said Bangah. She thinks the ability of internet companies to offer metrics not available in other mediums is also fueling the gains.


Digital video had the greatest year-over-year increase with 20.6% in advertising revenue growth last year, which the IAB says added up to $26.2 billion in 2020. Digital video increased its share of total internet ad revenue by 1.3% year-over-year, reaching 18.7%. Social media revenue grew 16% to $41.5 million in 2020 with nearly 30% of all internet advertising revenue (29.6%) tied to social media advertising.


Programmatic advertising revenues increased by $14.2 billion in 2020, a 24.9% year-over-year gain. The IAB also said that seven of every ten digital ad revenue dollars comes from mobile.


The IAB will release its annual podcast revenue report during next month’s 2021 IAB Podcast Upfront, but the trade group said the medium was one of the beneficiaries of brands timidly coming back into the ad marketplace last year. “We saw a number of shifts in performance to mission-based messaging which gave a lot of the more agile ad formats and platforms a leg up,” said Hogan, who includes podcasting on that list.

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