In a recent report from the Interactive Advertising Bureau (IAB) it has been confirmed that online advertising revenue has actually surpassed the revenue brought in from broadcast television ads. This is the first time that has occurred in history, making this quite a significant milestone in digital advertising. Digital ad revenue went up by 17% year-over-year in 2013, which brought the numbers up to $42.8 billion.
Broadcast television revenues also went up, but at a much more modest rate. Broadcast TV has seen very slow growth for several years, and in 2013 the total revenue was at $40.1 billion. Still a lot of money to be sure, but they have fallen behind digital ads. It is unlikely that they will pass digital ad spend again in the future.
Randall Rothenberg, the CEO and President of IAB, commented that “The news that interactive has outperformed broadcast television should come as no surprise. It speaks to the power that digital screens have in reaching and engaging audiences.” Despite this, however, it certainly will be a surprise to many people who still believe that digital advertising is still too new to compete with the established marketplaces.
There were many factors which led to digital ads surging ahead of broadcast. One major thing was that digital video ads shot up by 19% last year, bringing in about $2.8 billion. In addition, many of the major media companies are keeping up with the times by expanding their library of interactive media offerings. Disney, for example, is not only dominant on television, but they have been offering a lot of exclusive content through their many website properties. This way they can capitalize off of both broadcast ads, and the rapidly growing digital formats.
With continued double digit growth in digital ad spend, it seems likely that within the next five to ten years, interactive advertising will surpass the total television ad spend, which currently sits at about $74 billion.