Digital advertising revenues climbed to a high of $36.6 billion in 2012, according to the IAB Internet Advertising Revenue Report for the full-year of 2012. That historic number marks a 15 percent rise over 2011’s full-year number, which itself had been the highest on record, at $31.7 billion. Digital advertising now surpasses newspapers and magazines and is bigger than any other media in the U.S. with the exception of broadcast TV, which hit $40 billion. Customers are moving to digital mediums at a greater pace than ever before and advertisers are taking note.
Display Advertising Makes a Dent
Display-related advertising revenues totaled $12 billion, up almost 9%. With display advertising, an advertiser pays an online company for space on one or more of the online company’s pages to display a static or linked banner or logo. Streaming digital video, one component of display-related advertising, continues to grow the breadth and quality of content online. As advertisers follow their customer to digital channels the increased spend on those channels should be expected. According to the IAB report, here’s how display advertising revenues break down.
- Display/Banner Ads (21% or $7.7 billion)
- Rich Media (3% or $1.1 billion)
- Digital Video (6% or $2.3 billion)
- Sponsorship (2% or $845 million).
The Leverage in Lead Generation
Lead generation is another area of the digital advertising sphere that is experiencing growth. IAB found that lead generation revenues accounted for 5% of FY 2012 revenues, or $1.7 billion, up 11% from the $1.5 billion (5% of total) reported in FY 2011. Lead generation is when fees are paid by advertisers to online companies that refer qualified potential customers or provide consumer information where the consumer opts in to being contacted by a marketer. These processes are priced on a performance basis (e.g., cost-per-action, -lead or –inquiry). Performance-based pricing is gaining interest from marketers. Approximately 66% of FY 2012 revenues were priced on a performance basis, up from the 65% reported in FY 2011. Another report, the 2012 Lead Generation Benchmark Report from Marketing Sherpa, discovered that the forms of online advertising used in correlation with lead generation are webinars, emails, search media, and whitepapers though most marketers are choosing to send their messages out across multiple channels. The top strategic priorities for lead generation in the next 12 months are:
- Achieving or increasing measurable ROI (52%)
- Optimizing the marketing-sales funnel (51%)
- Gaining greater insight of audience (51%)
- Maximizing the lifetime value of customers (47%)
Massive Mobile Moves
As mobile and tablet devices become more popular, they’ll continue to drive investment and strategies from businesses. Mobile marketing provides businesses with new ways to reach consumers IAB found that for the second year in a row, mobile achieved triple-digit growth year-over-year. The mobile category grew 111% to $3.4 billion and accounted for 9% of total internet ad revenue in 2012. Mobile app environment continues to grow and mature as business models develop and advertising budgets grow to support the market. From payment options to utilities and local services, the best apps are no longer concentrated to just one vertical. IAB suggests that the growth in mobile adversting comes from:
- Growth in device penetration (Smartphone and tablet), led by Apple and Google
- Faster connection speeds as infrastructure and device upgrades occur
- Improved screen resolutions that allow more ads onto the mobile screen
- Greater sophistication in incorporating ads into mobile apps and websites
- Social media consumed on mobile devices
Digital advertising budgets are shifting as the best places to find a customer does. Online marketing is a must for businesses looking to expand, reach new customers and cultivate current customer relationships. In the digital space, display advertising, mobile marketing and lead generation are three areas that continue to grow each year. Customers browse the web, are active on social networks and marketers want to reach them. As customers become more tech-savvy, businesses need to become more digital-friendly in their marketing strategies.