The logos of Google, Facebook, Instagram, Twitter, Snapchat and TikTok displayed on a pc display screen.
Denis Charlet | AFP through Getty Images
Despite an preliminary falloff resulting from the Covid pandemic, digital promoting spending grew 12.2% yr over yr in 2020, in accordance with a brand new report commissioned by the Interactive Advertising Bureau and performed by PwC. But the report additionally confirmed the biggest gamers in the ecosystem additional entrenched their maintain on the U.S. digital ad market in 2020, commanding extra share yr over yr.
The pandemic brought on a direct pullback in ad budgets in 2020, with sure areas like journey remaining sluggish all year long. But in the latter half of 2020, political ad spend and vacation season gross sales helped to offset the losses in the primary a part of the yr to succeed in $139.8 billion whole for the yr. The development was slower than between 2018 and 2019 when spending elevated 15.9%.
The IAB mentioned an enormous surge in linked tv, e-commerce procuring and at-home deliveries created a “pendulum swing” that helped the sector proceed rising despite the turbulence earlier in the yr.
But the spend was largely concentrated with the key ad gamers, and much more so than in earlier years. The IAB mentioned the highest 10 firms held a 78.1% share of the revenues in 2020, with total revenues of that group alone exceeding $109 billion. The prime 10 firms accounted for a 75.9% share of revenues in 2018, rising to 76.6% in 2019. The IAB mentioned firms ranked eleventh to twenty fifth account for simply 6.2% of revenues, whereas smaller firms make up 15.7%.
The IAB doesn’t get away how a lot of that is made up of firms like Facebook, Google and Amazon. In a new report this week, eMarketer mentioned that Amazon’s share of the U.S. digital ad market was greater than 10% for the primary time in 2020. Google’s share was 28.9% of the U.S. digital ad market in 2020, and Facebook’s was 25.2%, in accordance with eMarketer.
Year-over-year development declined by 5.2% in the second quarter, the IAB report mentioned, however spending through the third and fourth quarters was up by 11.7% and 28.7% year-over-year, respectively. The report mentioned the fourth quarter of 2020 noticed the best income on file for digital promoting in greater than 20 years, which it attributed in half to promoting main as much as the election. Advertisers have been additionally spending 2020 budgets that had been paused earlier in the yr due to the pandemic.
Social media ad revenues reached $41.5 billion in 2020, the report mentioned, making up almost 30% of all web ad income. Digital video noticed 20.6% year-over-year development, growing its share of whole web ad income by 1.3% to succeed in 18.7%.
Programmatic ad income additionally elevated by 24.9% to succeed in $14.2 billion in 2020, however the IAB report questioned whether or not privateness adjustments like Google’s deprecating of third-party cookies will imply that development is unsustainable going ahead.
“Changes in consumer identity and attribution models announced by Google and Apple did not have a material impact in 2020, and are expected to build to a tipping point disruption as ecosystem participants and consumers adapt to new models,” the report mentioned. “Rather than a direct and significant impact immediately, the loss and blocking of identifiers on advertising products, tracking and other capabilities will be felt over time.”