The Interactive Advertising Bureau (IAB) released statistics on internet advertising for the first half of 2013 in the U.S. Online Ad Revenue Report, and the numbers are quite telling. Ad revenue reached a record high this year, with significant growth in mobile. These numbers indicate many implications for the trends that internet marketing is heading towards. Watch today's Daily Brown Bag for all the information you need on online advertising revenue, where it shows internet marketing is going, and what you should be paying attention to with your internet marketing strategy!


Hello, and welcome to our Daily Brown Bag where today we’re going to be talking about some record online advertising numbers that have just come out. I’m Chad Hill and I’m joined by Adam Stetzer.

Good morning, Chad. Yeah, people like to track the overall size of our market, and people have been predicting that maybe it will peak, maybe it will slow down, maybe something new will come along and Google won’t be the only show it town. So, it’s some very important numbers coming from the Interactive Advertising Bureau (IAB). They released their U.S. Online Ad Revenue Report for the first half of 2013 just recently. Let’s go through some of these numbers. There’s quite a few here.

The first headline, and I think this is news for the internet marketing space is that online advertising revenues hit an all-time high of $20.1 billion. That’s an 18% increase from the first half of 2012 when we were at $17 billion, so that’s some very, very healthy growth. Search revenue is still on top as you begin to dissect that $20 billion number with 43% of the market share and coming in at just under $9 billion. But, mobile advertising revenue is the big story here, and probably most people following the trends would not be surprised, is really advancing. It has 16% of the market share which is still in the minority with $3 billion, but that’s up 145% from the first half of 2012, so we’ve seen a lot of growth in mobile which is participating more and more in this total, overall number. Display ads are at about 30%, coming in at about $6 billion. Web video also has a strong increase, up 24% and now capturing $1.3 billion. So, a lot of numbers here, a lot of strong growth, and not surprisingly, some increase in mobile and video. Let’s digest this for our internet marketing community.

I think one of the main takeaways is that the ads are becoming much more diverse in terms of the different opportunities that advertisers have online. A lot of this is driven by the fact that people are using multiple devices at the same time. The other day we discussed that a huge percentage of people who were watching TV also were using their mobile devices at the same time. So, the brands and the advertisers who are best able to join all those different screens together into one cohesive campaign are going to win. The other big trend here is that, of course, mobile is growing rapidly and we should also note that we were at record highs already, but we haven’t even gotten to the holiday season this year, so this is going to be a banner year for online advertising.

There’s a little bit for everybody in these numbers. The folks that have been cheerleading mobile will see that 145% increase and say, “Look! I told you so!” But, the guys cheerleading search who still do pay-per-click and traditional search and display advertising are still going to say, “Well, it’s still on top. It’s the big number.” But, what’s interesting to me is that there are still a lot of internet marketers who just don’t want to touch paid advertising at all and are camped out only in the SEO, social media, maybe some e-mail marketing, and seem to be ignoring the fact that this market is still roaring here and still growing.

There was a recent study that Wordstream put out that said that, basically, many small businesses are wasting 25% of their PPC budgets. So, the information we hear on that is that a lot of times people feel like they’ve been burned by pay-per-click and online advertising in the past. And, again, I think that if you advertised online, especially with display advertising, three or four years ago, and you’ve made your determination of ROI on that, based on what people were doing three or four years ago, it’s changed drastically. We have re-targeting, we have more interesting ways to reach and better target users based on their activities and the other types of things they’re doing on the web, versus the old way of doing it, which was, “I want to reach people between 18 and 24 on this website.”

Right, so there’s really a lot of reasons for small businesses to look at maybe outsourcing this, given some of these stats. Maybe some of their conclusions were not correct, maybe they were old, and the fact that this market is just growing. A diversified approach, we say this in almost every video, is always more successful, so getting your clients into some sort of paid advertising is smart, retargeting and remarketing is a great place to dip your toes in, so these are some of our thoughts. We’d like to hear your reactions to these numbers. Particularly, are you using pay-per-click? Do you see the growth there? What are your clients saying about it? If you’ve enjoyed this video, we hope you’ll subscribe to our videos.