Internet advertising revenue surpasses broadcasting TV for the first time

BY Ellen Rolfes  April 11, 2014 at 9:08 AM EDT
Photo by Kevin Harber/Flickr

Companies are spending more on Internet TV ads, so much so, that digital revenue exceeded that of broadcast TV in 2013. Photo by Kevin Harber/Flickr

For the first time in history, U.S. Internet advertising revenue exceeded broadcast advertising revenue.

In 2013, digital advertising revenue hit $42.8 billion in contrast to broadcast television’s $40.1 billion.

The Interactive Advertising Bureau, a membership organization of more than 600 media and technology companies, released the report with the “momentous figure” on Thursday. The survey data was collected and prepared by PricewaterhouseCoopers.

“The news that interactive has outperformed broadcast television should come as no surprise,” Randall Rothenberg, president and CEO of IAB, said in a statement. “It speaks to the power that digital screens have in reaching and engaging audiences.”

The report states that advertising linked to mobile, digital video and search engines contributed to the 17 percent jump in revenue from 2012 to 2013. Most notably, mobile ads tripled for the third year in a row, accounting for $7.1 billion of digital revenue.

Advertising revenue market share by media - 2013 ($ billions)

So what’s the elephant in the room? It’s that digital revenue has only outpaced broadcast television. The Wall Street Journal notes that when you compare total TV advertising and Internet revenue — the digital ad sellers still have a way to catch up. According to eMarketer data, ad sales for broadcast and cable networks, syndication, and local TV were $66 billion in 2013.

But the growth numbers tell the story. MediaPostDaily news reported in December that TV ad sales are only expected to grow annually in the low single-digit percentages. If growth in digital sales continue to increase as fast as they did in 2013, it’s only a matter of time before the Internet overtakes not just broadcast, but all TV ad revenue.