Digital ad revenue experienced tremendous growth in 2021, according to the IAB. Search continues to be the leading format.
However, the IAB noted in their Internet Advertising Revenue Report: Full Year 2021 report that the growth of search wasn’t as strong as other formats, such as digital video, which was up 50 percent year on year (YoY). As a result, search lost 0.8 percentage points in total revenue share.
Paid search remains king. With 41.4% of all digital ad revenue in 2021, paid search is still the leading format. Mobile accounted for $54.7 billion (up from $39.7 billion in 2020), while desktop accounted for $23.5 billion (up from $19.3 billion in 2020).
Social media advertising rebounds. Social media advertising plateaued at the start of the pandemic. In 2021, revenue from social platforms (including Meta-owned networks, Twitter, Snapchat and TikTok) hit $57.7 billion, up from $41.4 billion in 2020. What helped fuel this growth? In particular, the IAB noted that 80% of brands now work with influencers and content creators, which began during COVID-19.
The state of digital advertising. It’s strong. Of note from the IAB report:
- Total U.S. digital ad revenue increased by $50 billion in 2021.
- YoY growth was 35.4%, the highest increase since 2006.
- YoY growth was strong in each quarter of 2021. (And that is expected to continue in 2022.)
- Q4 2021 digital ad revenue hit a new record: $55 billion. That’s up nearly $10 billion from the same 2020 holiday season.
Why we care. At the start of the pandemic, there was a lot of uncertainty about whether we’d continue to see online advertising continue to grow. In 2020, we wondered whether we’d only see single-digit growth heading forward. Thankfully, that hasn’t happened. Search – like all other digital channels and formats – shows strong growth.
The IAB predicts digital ad growth to continue across all channels. However, the IAB notes some potential challenges, including privacy regulation, the deprecation of third-party cookies and measurement. What else could impact digital marketing this year: Russia’s invasion of Ukraine, ongoing supply chain issues in the U.S. and other economic issues. That said, as the IAB notes, “brands have spoken, and digital is where they are putting their dollars.” That will again be true in 2022. You can view the entire report here (note: the report is free, but you must log in or create an account to download it).