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IAC report: Video growth pushes H1'19 digital ad spending to nearly $58B

Buoyed by video gains, digital advertising grew 17% during the first half of 2019, reaching just under $58.0 billion, according to a report from the Interactive Advertising Bureau Inc.

The report, prepared by PricewaterhouseCoopers, found that spending on digital advertising in its various forms totaled a record $57.9 billion, up from $49.5 billion in the first half of 2018.

Total digital ad revenues in the second quarter of 2019 grew 16.7% to $29.9 billion from $25.6 million in the corresponding year-earlier period. The growth rate receded from the first quarter, which saw digital ad revenues total $28.0 billion, 17.2% more than the $23.9 billion recorded in the prior-year period.

A breakdown shows that video advertising was the fastest-growing segment in the first half, registering a 35.7% rise to $9.50 billion during the period ended June 30, versus $7.01 billion in the prior-year period. The video segment accounted for 16.4% of digital ad revenue, up from 14.2% in the first half of 2018.

"Digital video growth has played a key role in giving 2019 the strongest opening six months in digital's history," said Sue Hogan, senior vice president of research and analytics at IAB. "Increasingly, advertisers are turning to social video stories and connected TV to reach a growing audience of 'cord-nevers' — a younger cohort who've never subscribed to cable television and cannot be reached via linear TV ads."

Search and display remained the leading formats, although each lost share. Search grew 13.7% to $26.0 billion from $22.8 billion, accounting for 44.8% of digital ad revenues, down from 46.1% in the 2018 period. Banner revenues rose 13.3% to $17.8 billion from $15.7 billion, or 31% of digital ad revenues, down from 32% in the first six months of 2018.

All told, mobile platforms continued on their growth path, with over $39.9 billion, representing 69% of digital ad revenues, compared to over $17.9 billion from desktops. IAB expects that trend to continue with the rollout of 5G technology and its increased speed, facilitating even more usage on consumers' personal devices.

IAB noted that digital advertising is outpacing other media in terms of gains. However, the report said with near smartphone ubiquity and the maturation of social media, the industry is looking to connected TVs, augmented reality and "the vast potential of 5G" to drive more advances.