Spending on digital advertising grew 12% in 2020 despite the success of the pandemic

Despite an initial drop due to the Covid pandemic, spending on digital advertising grew 12.2% year-on-year in 2020, according to a new report commissioned by the Interactive Advertising Bureau and conducted by PwC. But the report also showed that the most important players in the ecosystem further consolidated their position in the US digital ad market by 2020, with more stocks year after year.

The pandemic led to an immediate withdrawal of advertising budgets in 2020, with certain areas such as travel remaining slow throughout the year. But in the second half of 2020, political advertising spending and holiday season sales helped offset losses in the first half of the year to $ 139.8 billion in total. Growth was slower than between 2018 and 2019, when spending rose 15.9%.

The IAB said a huge increase in connected television, e-commerce shopping and home deliveries created a “pendulum swing” that helped the sector continue to grow despite the turmoil earlier this year.

But spending was largely concentrated on major advertising players, and even more so than in previous years. The IAB said the top ten companies had a 78.1% share of revenue by 2020, with global group revenues exceeding just $ 109 billion. The top ten companies accounted for 75.9% of revenue in 2018, which increased to 76.6% in 2019. The IAB said companies ranked 11th to 25th accounted for only 6.2 % of revenue, while smaller companies account for 15.7%.

The IAB does not find out how much this is made up of companies like Facebook, Google and Amazon. In a new report this week, eMarketer said Amazon’s share of the U.S. digital ad market was more than 10% for the first time in 2020. Google’s share was 28.9% of the market of US digital ads in 2020 and that of Facebook was 25.2%, according to eMarketer.

According to the IAB report, year-on-year growth slowed 5.2% in the second quarter, but spending during the third and fourth quarters rose 11.7% and 28.7% year-on-year, respectively. The report said that in the fourth quarter of 2020 it recorded the highest revenue recorded in digital advertising in more than 20 years, which it attributed in part to pre-election advertising. Advertisers were also spending 2020 budgets that had been stopped earlier this year due to the pandemic.

Advertising revenue on social media reached $ 41.5 billion in 2020, according to the report, which accounts for nearly 30 percent of all Internet advertising revenue. Digital video experienced year-on-year growth of 20.6%, increasing its share of Internet advertising revenue by 1.3% to 18.7%.

Advertising revenue from programming also rose 24.9% to $ 14.2 billion in 2020, but the IAB report questioned whether the privacy changes, such as the fact that Google depreciated third-party cookies , would mean that growth will not be sustainable in the future.

“Changes in consumer attribution and identity models announced by Google and Apple did not have a material impact in 2020 and are expected to occur to a turning point as participants and consumers ‘ecosystem adapt to new models,’ the report said. “Instead of an immediate and significant impact immediately, the loss and blocking of identifiers in advertising products, tracking and other functions will be felt over time.”