IAB: US digital ad growth rate slowed during the 1st half of 2019

Dive Brief:

According to the Interactive Advertising Bureau's latest biannual report on digital advertising, which was prepared by PwC, the first half of 2019 saw a 17% growth in digital advertising revenue compared with the same period a year ago, for a total of $57.9 billion. The overall total is the highest the industry has ever seen.
While digital advertising revenue grew during the first half, the rate of growth is lower than the 23.1% growth IAB's analysis shows when comparing the first half of 2018 with the same period in 2017.
The IAB report points to substantial growth in several areas, including video, which is up nearly 36% to $9.5 billion in the first half of the year, driven by a boom in mobile video.

Dive Insight:

The decline in the revenue growth rate compared with the previous year could be a warning sign, as a similar drop in the growth rate was last experienced in 2009 when the industry experienced its first decline due to the Great Recession, Ad Age reported, citing comments by PwC. One key factor that could push the growth rate down further includes another possible recession. The IAB report also points to the cost of complying with the growing patchwork of privacy regulations in various states as a potential drain on digital advertising revenue.

However, there are also strong indicators that could offset a downturn. As high-speed 5G mobile transmission rolls out over the next few years, growth in mobile video might continue to tick upward, pulling with it more mobile video ads. Mobile ads in general are up to $40 billion, a 29% jump compared to the same period in 2018.

Additionally, digital audio, powered by the soaring popularity of podcasts, hit $1.2 billion for the first time in the first half of this year, for a 30% increase over the same time last year.

Rich media ads are also seeing a boost, rising 20% over the same period last year to $1.7 billion, while banner ads are up 13% and social media revenue increased $16.5 billion.

While the report suggests that the cost of compliance with state-by-state privacy regulation could also be a factor in declines, it doesn't provide any data to support that thesis. The IAB has consistently advocated a federal law instead of state-by-state regulations.