Digital Ad Revenue in the U.S. Surpassed $100 Billion for the First Time in 2018

kerv product being used on pants

Key points:

  • The report, commissioned by the Interactive Advertising Bureau and conducted by PwC, says digital ad revenue in 2018 was 21.8% higher than full-year 2017 revenue of $88.3 billion.
  • The growth in digital comes as advertisers continue to seek the massive audiences and targeting of tech giants like Google and Facebook.

Digital ad revenue just keeps on growing.

A new report says internet advertising revenues in the U.S. totaled $107.5 billion for full-year 2018 — the first time that figure has topped $100 billion.

The report, commissioned by the Interactive Advertising Bureau (IAB) and conducted by PwC, said revenue in 2018 was 21.8% higher than full-year 2017 revenue of $88.3 billion. That double-digit growth in internet advertising comes as TV advertising increased 1.4% and radio grew 1% from 2017 to 2018, according to the report. Meanwhile, newspaper advertising decreased 6.9% and magazine advertising fell 2.1% in 2018 year over year.

The momentum in digital comes as advertisers continue to seek the massive audiences and targeting of tech giants like Google and Facebook. But the prospect of regulation may introduce hurdles for that growth. Meanwhile, social media ad growth is slowing, which could be why companies like Facebook are exploring new ways to make money, like shopping ads on Instagram.

The IAB report said 75% of internet advertising revenues in Q4 2018 were concentrated with the top 10 ad-selling companies, but the report doesn’t break out those companies. As of February, Google was expected to hold 37.2% of net digital ad revenue share in the U.S. and Facebook was expected to hold 22.1% by the end of 2019, according to eMarketer. The organization said in March that Amazon, Facebook and Google are expected to take in nearly 70% of digital spending in the U.S. by 2021.

The IAB report said mobile and video are leading digital marketing’s growth, with mobile reaching $69.9 billion, up 40% from the previous year. Ad revenue from digital video increased from $11.9 billion in 2017 to $16.3 billion in 2018.

Social growth slowdown

Social media advertising revenue grew 30.6% in 2018 to $28.9 billion, but the report notes that expansion has been slowing and is “well below” the 46.6% compound annual growth rate of social from 2012 to 2018.

PwC U.S. partner David Silverman said social’s slowing growth may have to do with the “law of large numbers.”

“The total number of dollars flowing into social has gotten to be relatively significant at 27% of the overall pie, up from 8% [in 2012],” he said. “A lot of the growth in the industry has been driven by social media.”

DTC boon

The report calls out digital ad revenue stemming from e-commerce and the emergence of the direct-to-consumer economy as a key driver of some recent growth. Companies are using consumer data including purchasing and browsing history to let advertisers reach audiences programmatically “in more effective ways,” it said. Elements like shoppable ads or more sophisticated search capabilities in e-commerce platforms “are turning clicks into veritable conversions,” it said.

“There’s growth being driven by the direct-to-consumer market in that the types of companies doing direct-to-consumer lean on the types of advertising available through digital advertising much more heavily than perhaps traditional advertising,” Silverman said. He said those companies are looking for return on investment, ability to track their advertising, look at consumer behavior and be able to target certain people where they’re making purchase decisions.

How regulation will affect growth

The question of regulation looms over the digital ad ecosystem. Democratic presidential candidate Sen. Elizabeth Warren in March unveiled a plan to break up Amazon and other tech giants, saying they have “too much power over our economy, our society, and our democracy.” Warren has said Amazon, for example, plays a dual role of running a marketplace and selling its own products in it, creating a “conflict of interest.” Amazon removed some promotional spots for its own products earlier this year.

The report said data-driven advertising in recent years has seen substantial growth aided by the access players have had to consumer data and models that evaluate that data. But regulations like GDPR from the EU and the California Consumer Privacy Act are impacting U.S. companies “and this impact will likely grow,” the report said. It said larger players will be in a better position to continue growth and invest in compliance, while smaller players may have more difficulty setting up regulatory guardrails.

“I do think there’s going to be some impact as we figure out how we need to conduct business a little differently, and we want consumers to be protected,” Sue Hogan, senior vice president of research and measurement at IAB, said. “I think that we just haven’t figured it out yet.” Hogan said new innovations like 5G could help offset some of the potential effect.

Silverman said regulation will be a challenge and a potential obstacle in the future.

“I think the bigger threat is the stuff that hasn’t happened yet,” he said. “If companies don’t respond appropriately, there could be further regulation. But at the same time, there are opportunities for companies to think of doing new things in a new and innovative way that gets the user’s trust.”

This article was originally seen on

Click here to request an interactive video trial on your creative. 

Recent Posts

KERV’s Active Attention Index

The New Industry Standard for Determining True Audience Attention. Understand the quality and depth of deterministic user actions as they engage with video.
Devin Monds
Head of EMEA Sales

Devin is a dedicated and experienced media sales professional with over 15 years in the digital media space in both North America and EMEA. He most recently headed up the International Team at Adludio, the premier advertising platform for delivering strong creative on mobile devices. Prior to his role at Adludio, Devin worked on the Global Brand Partnerships team at CAA Sports in London, and was International Sales Director at LoopMe where he built out the US West Coast Sales Team from Los Angeles. With a proven track record of new business development and revenue generation, Devin has a multitude of solid relationships with brands and agencies, globally.

He relishes the opportunity to engage with new clients on a daily basis, in order to identify tailored solutions that can drive their desired outcomes. Furthermore, he takes pride in his culinary skills, often experimenting with new recipes and delivering delectable results.

    Brad Quinn
    VP of Publisher Development

    Brad Quinn is the VP of Publisher Partnerships based out of our NYC office. He has over 15 years of experience across Agencies, Publishers and Tech. At KERV, Brad leads the Partnerships team focused on content providers and distributors. He integrates KERV’s tech capabilities across ads and content to create a real‑time interactive/shoppable experience.

    David Knight
    VP of Engineering

    Before joining KERV in 2018, David Knight spent over 31 years building software products for large corporations like IBM and Schlumberger, 3-person “garage” startups and everything in between. He’s spent the last 15 years discovering and refining the tools, development process, and necessary culture that create great Engineering teams capable of meeting the special demands of technology driven startups.

    Dan Bloomfield
    VP of Technical Ad Operations

    After spending time living in New York and working for NBC Universal’s first digital operations team Daniel moved to Austin in 2009 to further pursue ad tech. During the next decade, he built a career working on interactive video first for Sizmek and then Nexstar. He immediately jumped at the idea to work for KERV and was one of the first to join the company in 2017.

    Creed Pettit
    SVP, Head of Partnerships

    Creed Pettit is an entrepreneurial sales executive offering experience in all aspects of solutions selling, team management, negotiation, organizational leadership, go-to-market strategies and momentum driven models. Prior to joining KERV, Creed served as Media & Entertainment Vertical Sales Leader, Global Business Solutions at TikTok.

    Karen Germ
    VP of Marketing

    Karen Germ is a seasoned marketing and communications professional with a nearly 15‑year history serving in leadership roles across the advertising and technology landscape. Most recently, Karen served as OAAA’s VP of Marketing where she implemented industry leading initiatives to elevate and promote the power of OOH for advertisers, agencies, partners and consumers. 

    Ryan Schoenfeld
    VP of Digital Strategy

    Ryan Schoenfeld’s career started as an intern at a smaller digital media agency while attending the University of Texas. Since then, he has spent over 15 years working in the programmatic advertising/video space.

    Bill Roberson
    VP of Media

    Bill Roberson has worked in the digital space for over 17 years, spanning Media Buying, Ad Operations, Analytics and Optimization, Account Management and now Creative.

    Grant Gorton
    VP of Creative

    Grant has been with KERV as VP of Creative for over 5 years, and has worked as a designer and creative director at agencies and media companies for the last 17 years.

    Michael Fleischman

    Michael Fleischman serves as the CFO at KERV Interactive in addition to being an Executive Residence at Progress Partners, a Merchant Investment Bank and Venture Fund. Prior to KERV Interactive, Michael was the CFO and current Board Member at Digital Remedy, a privately-held media execution company supporting agencies, publishers, and brands in navigating the complex adtech landscape of digital success.

    Previous to Digital Remedy, Michael spent 20 years at Cablevision and Rainbow Media Holdings during which he was instrumental in the launch and management of multiple regional sports networks and a number of national cable networks including American Movie Classics, Bravo, The Independent Film Channel as well as the structuring of partnerships with companies including Liberty Media, NBC, Fox/NewsCorp, and MGM. 

    A native of the New York City area, Michael resides with his wife where he enjoys biking, tennis  and spending time with his wife and three adult children.

    Taylor Pate

    Taylor Pate serves as CTO at KERV Interactive. Taylor’s experiences in the advertising and creative industry spans 14. He began his career in 2008, working as a designer, animator and art director specializing in the design and production of interactive art. Early in his career, he created 3D character animations and tools for best-selling video game series The Sims while working at Edge of Reality, who developed video games for Nintendo 64, GameCube, PlayStation and Xbox.

    In 2012, Taylor made the shift to work in-house at an online advertising and media services agency, LIN Digital, where he was promoted multiple times in a four-year span. He worked on a variety of online, interactive projects for clients while also developing and automating internal tools and processes. Taylor then spent the next two years working as the director of engineering at multi-platform digital media company HYFN Local, a division of multi-billion-dollar corporation Nexstar Digital LLC.

    Jay Wolff

    Jay Wolff serves as Chief Revenue Officer at KERV Interactive, leading global revenue and partnerships, in addition to being the Executive Vice President of 212 NYC, New York’s leading organization for the digital advertising industry. 

    Jay’s expertise in revenue and partner growth in the advertising industry spans 19 years. Most recently, Jay served as CRO of Varick Media, and Chief Growth Officer at Boostr, the first end-to-end SaaS revenue management system for media companies. Previously, as Regional Vice President of SambaTV, Wolff built the revenue organization and east coast market from the ground up. 

    Prior to joining SambaTV, Wolff served as Vice President of agency and brand partnerships at PulsePoint; instrumental to the merger of ContextWeb and Datran Media.

    Jay holds a BS in Marketing from Syracuse University and a Certificate of Management from the University of Chicago. He resides in Rye Brook, NY with his wife and daughter, Olivia. 

    Dan Bienenfeld

    Before co‑founding KERV in 2017, Dan Bienfeld spent the previous 35 years founding six start‑ups in various verticals such as publishing, licensing, med‑tech and ad‑tech. Within these companies, he enjoyed two meaningful exits, which provided him with the ability to continue his passion as an entrepreneur. 

    Aside from bringing together ‘Rock Star Talent,’ his main focus has been raising over $50M, primarily for the startups identified above, as well as creating strategic partnerships. Currently he lives in Westlake Village, CA with his wife and two kids. In addition to his entrepreneurial journey, he also enjoys working out, traveling and an addiction to sushi.

    Gary Mittman

    Gary Mittman brings more than 30 years of experience in technology and direct marketing, as well as substantial experience in building startups to exit with creativity and agile development. Before starting KERV, he held numerous top‑ranking leadership roles, including Founder & President of Nami Media (which was acquired by Lin Media/Nexstar Media Group), CEO & Founder of Marina Communications (also acquired), and Vice President of New Business Development, Direct Response at Western International Media (now Initiative Media).

    Gary also brings a decade of experience in the entertainment industry, including managing all booking for New York City’s premiere performance night club, The Ritz, as its Executive Manager and Booking Agent, Executive Producer of the MTV concert series ‘Live At The Ritz’, a Professional Manager at Chappell Music Publishing, and started out as an Assistant to legendary Clive Davis at Arista Records.

    Andi Fenster

    Andi Fenster went into the profession of Human Resources 30 years ago, because she believed from a young age that the way you treat your employees is what you get out of them. Her goal as an HR professional has been to help create the type of work environments that inspire folks to want to come to work. She is also a Management/Leadership/Career Coach and her focus is optimizing humans focusing on the mind‑body connection. 

    “We, each, have tremendous potential and the abilities to level‑up if we choose to understand how to get the support we need to get us there. Helping talent thrive and helping them create success is my reason for doing what I do.”

    Marika Roque
    COO & Chief Innovation Officer

    Marika Roque is a top expert in digital media, data and organizational infrastructures recognized with over 15 years of professional leadership experience. Previous to KERV, Marika worked as the vice president of digital operations for Mass2, a division of multi-billion-dollar corporation Nexstar Digital LLC. Prior to Mass2, Marika served as vice president of digital media activation at LIN Digital.

    Marika has held senior-level positions for leading advertising agencies in the Austin, Texas area including Sizmek and GSD&M. She also spent years in Chicago working for FCB Global and Starcom MediaVest Group. While at Starcom, Marika was recognized for her involvement in the creation of the first agency-side programmatic pipelines and what the industry now refers to as an agency trading desk.

    Marika holds a Bachelor’s in Advertising from The University of Texas at Austin, which she achieved while also participating as a former D1 collegiate athlete.