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Internet Advertising Revenues Close in on $50 Billion

Digital advertising revenues rose by 16% to $49.5 billion in 2014, led by a 76% boost in mobile spending, according to the IAB Internet Advertising Revenue Report released today. It marked the fifth straight year of double-digit increases for the medium.

Mobile was the second largest format in digital advertising at $12.5 billion, accounting for 25% of total spend last year versus 17% in 2013. “A prominent rise in social—a significant mobile activity—is driving growth in advertising revenue,” said David Silverman, a partner in PwC US, which prepared the report for IAB.

Most of mobile’s increase came at the expense of search, which declined five share points to 38% of total spend. But search remains the most popular ad format, followed by display with a 27% share. Banner ads held their place as the largest budget item under the display category, followed by video.

No significant change was detected in the pricing models favored by digital marketers last year. Two thirds of spend was devoted to performance-based ads and one third to impression-based models—though there was a 1-point uptick in usage of hybrid models.

Other highlights of IAB’s revenue assessment:

  • Social media spend rose in tandem with mobile, increasing by 57% to $7 billion.
  • Digital video ads rose by 17%, to $3.3 billion in expenditures.
  • Retailers remained the biggest spenders online, accounting for 21% of the total in 2014. Next came financial services at 13% and automotive at 12%.
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