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Mobile Ads Skyrocketed 76% in 2014, Making Digital Advertising a $50 Billion Business

IAB report shows the rapid evolution of devices and social

Smartphones and tablets are changing advertising budgets.

The digital advertising space grew 16 percent last year compared to 2013 and totaled $49.5 billion in sales, according to an Interactive Advertising Bureau report released today.

A key driver in that growth was the burgeoning mobile space, which the IAB found to have skyrocketed by 76 percent—from $7.1 billion in 2013 to $12.5 billion last year.

"High double-digit growth in mobile advertising is a reflection of the continued shift in consumer behavior away from desktop and towards mobile devices," stated David Silverman, a partner at PricewaterhouseCoopers U.S., which prepared the data for the IAB.

The organizations also said that industrywide online ad revenues in fourth quarter 2014 were up 17 percent year-over-year, reaching $12.1 billion. What's interesting about that number is that it is a little less than one-fourth of 2014's total, even though the holiday shopping season would seem to be a time when digital retailers would particularly be opening up their budgets. So either digital ad buying has truly become a year-around affair or merchants slightly scaled back spend in Q4.

The new research also revealed that retailers were the leading category in digital ad spending, accounting for 21 percent of the marketplace in 2014, followed by financial services (13 percent) and automotive (12 percent).

Here are other digital ad highlights when comparing 2014 to the year before, per the IAB:

  • Going into next week's Digital Content NewFronts, marketers should be keenly interested in this figure: Online video totaled $3.3 billion in '14, a 17 percent increase over revenues of $2.8 billion the year before.
  • Social media rivaled mobile in terms of growth, jumping 57 percent last year to $7 billion.
  • Search revenues increased 3 percent to $19 billion.
  • Display ads also saw modest growth, up 5 percent to $13.5 billion.

Lastly, IAB chief Randall Rothenberg pointed toward video's growth in connection to next week's NewFronts: "The news of digital video's double-digit growth is also no surprise. Brands and agencies are clamoring to get into the upcoming Digital Content NewFronts, where they will experience the latest in storytelling in sight, sound and motion."

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