IAB: Digital Ads Grew 29% In Q4 In Pandemic Rebound
Third, even though some sectors, like travel, probably slashed their budgets overall during the year, the rise of ecommerce meant that more marketers had reason to shift advertising dollars online, where they could influence a purchase close to the action.
Finally, online advertising’s use of performance-based, cost-per-action buying models made it easier to justify continued spending. Two-thirds of online advertising revenues came from performance pricing models, while 32% used CPM models.
“If you’re meeting KPIs, you’ll continue to spend,” Cohen said.
Programmatic’s banner year
Programmatic advertising grew 25% YoY to $71.2 billion in 2020. A full 88% of ad spend is programmatic, up from 82% last year.
But programmatic might slow down in the coming year, due to bumps created by the restrictions around tracking online identity.
Cohen said he hopes the reinvention of the addressable market won’t slow down growth in 2021, but programmatic might take a breather to catch up.
Growth by channel
Seven of every $10 spent on digital advertising goes to mobile.
“The year of mobile is over,” Cohen said. With mobile advertising already highly penetrated, growth will likely slow for the format.
Meanwhile, digital video advertising revenues grew 20.6% YoY to $26.2 billion, and accounts for 19% of internet advertising revenue. Of all channels, digital video grew the most in 2020.
Audio was another hot format, growing 13% YoY to $3.1 billion.
Winners and losers
The top ten companies in internet advertising accounted for 78% of total spend in 2020, compared to 76% in 2018 and 77% in 2019.
So while the notion of advertising’s biggest players are swallowing more of the pie, they are doing so slowly.
“While it is increasing, it’s not increasing at tremendous rates,” Cohen said.