Dive Brief:

• The Interactive Advertising Bureau announced Q1 U.S. digital advertising revenue hit $19.6 billion, the highest ever for a first quarter and representing a 23% year-over-year increase, per a press release made available to Marketing Dive.
• The growth stems from interactive advertising’s ability to reach consumers on connected screens where they are spending more of their time, according to Chris Kuist, Senior Vice President, Research and Impact, IAB, in the press release. The strong Q1 results are a testament to interactive’s ability to attract audiences and, by extension, marketing dollars, added David Silverman, a partner at PwC US.
• The data was released in the IAB Internet Advertising Revenue Report, independently conducted by PwC US and issued twice yearly for full and half-year data as well as top-line Q1 and Q3 estimates. The reports data comes from online advertising revenues from websites, commercial online services, free e-mail providers and other companies selling online ads.

Dive Insight:

In some ways, it has been a tough year for digital marketing so far in 2017, from major brands like P&G and Coca-Cola struggling to address digital's challenges coupled with renewed interest in TV ads to a growing list of marketers reducing or exiting their ad commitments to YouTube and other platforms over brand safety concerns. In this light, the IAB results are encouraging, suggesting that the significant amount of tumult so far this year in the digital marketing space has not impacted digital budgets so far.

Digital spending had been forecasted to surpass linear TV for the first time in 2017, but previous analysis from industry observers determined that milestone was actually reached before the end of 2016. The IAB report finding Q1 revenue set an all-time high for digital ad revenue is an indication that digital spending hasn't slowed down in the months since.

IAB's SVP Kuist pointed to what is likely the strongest driver of digital budgets – people are simply spending more time on various connected devices. And for some users connected devices including both smartphones and other mobile screens as well as laptops and desktops have somewhat or completely replaced watching video on traditional TV sets. In response brands have been forced to rethink video advertising strategies in order to reach an increasingly spread out audience across platforms, devices and screens.

The IAB report pointed out that Q1 this year was the second-highest quarter for digital ad revenue of all time, only surpassed by Q4 2016 which reached $21.6 billion. The Q1 results also represented the seventh consecutive first quarter to have double-digit year-over-year growth.