Can Digital Marketing Industry Sustain 2019 Momentum in Tumultuous 2020?
Late last month, the Interactive Advertising Bureau (IAB) released a pair of reports on digital advertising revenues. The first, “IAB Internet Advertising Revenue Report,” shows the digital marketing industry continuing to grow in 2019; it also provides a snapshot of Q1 2020. The second, “Coronavirus Impact on Ad Pricing Report,” shows how ad prices have fluctuated amid the fallout from the global pandemic.
According to the first report, 2019 was another banner year for digital advertising. US digital ad revenues grew to $124.6 billion, up 16 per cent from the previous year. Revenue growth isn’t quite as robust as it has been in the past, but this is the natural by-product of the market approaching maturity. Revenues from video ads on mobile and desktop were up 33.5 per cent to $21.72 billion in 2019, and audio ad revenues grew 21.2 per cent to $2.72 billion.
The industry’s strong performance continued through Q4 2019 (revenues up 12.9 per cent year-over-year) and into Q1 2020.
“First quarter 2020 US revenues totaled $31.3 billion, a 12% increase from Q1 2019,” an overview from the IAB read. And then, the coronavirus pandemic hit.
COVID-19 hasn’t affected the digital marketing industry as harshly as some sectors, but its impact has been felt. Two-thirds of digital publishers reported lower advertising CPMs (cost-per-thousand impressions) with display advertising taking the biggest hit. Ad prices have declined by 27, 28, and 29 per cent on desktop, mobile, and tablet devices, respectively. Meanwhile, pricing on connected devices – smart TVs, gaming platforms – has been resilient, with an average CPM reduction of only around 6 per cent.
Will year-over-year digital marketing revenues continue to grow in 2020? It may be too early to say – certainly, it will be difficult to match 2019’s robust numbers. However, there are signs that the economic trauma inflicted by the COVID-19 pandemic is stabilizing; brighter days are ahead.
As a Google Premier Partner digital marketing agency, GrowthEngine Media is equipped to help you navigate these turbulent and position you for success in the second half of 2020 and beyond. Contact us today to learn more.