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Digital ad revenue tops other media categories for first time: report Add to ...

Internet users may scoff at banner ads, swat away irritating pop-ups, and get creeped out by ads that follow them from one website to another, but digital is now the favourite media category of Canadian advertisers.

A new report says Canadian Internet publishers earned more advertising revenue than any other media in 2013, marking the first time digital media outperformed television, daily print newspapers, and radio broadcasters.

Digital ad revenue grew 14 per cent last year, rising to $3.5-billion from $3.1-billion, according to the Canadian Internet Advertising Revenue Survey, released Wednesday by the Interactive Advertising Bureau of Canada.

Though television advertising was down 2.3 per cent, from $3.47-billion to $3.39-billion, it still took the second-highest share of revenue. Daily print newspapers earned the third-highest share of revenue, despite a drop of 17 per cent, from $2.02-billion to $1.68-billion. Radio placed fourth, rising slightly from $1.585-billion to $1.6-billion.

Magazines fell 2.7 per cent, from $573-million to $558-million, and out-of-home advertising such as billboards rose 5.7 per cent from $486-million to $514-million.

The survey illustrates that Canadian publishing and broadcasting has become a tense game of stealing market share from other media, as the total amount of marketing dollars spent on major media remained effectively static, rising from $11.22-billion in 2012 to $11.26-billion in 2013.

The shift to digital media corrects what analysts have called the “online advertising gap,” referring to the lower share of ad money flowing to those channels despite consumers spending a higher percentage of their time there. Many marketers still view legacy media, such as print and television, as more influential.

“There is always a lag time of advertisers catching up,” said Chris Williams, the president of the IAB.

The report also shows advertisers chasing consumers as they rush to embrace mobile devices: while spending on desktop/laptop advertising rose five per cent, spending on mobile and tablet advertising skyrocketed 177 per cent, from S160-million in 2012 to $443-million in 2013.

Video is another bright spot for publishers: Online video ad revenue grew 58 per cent to $146-million.

Canadian marketers are in the vanguard. Online publishing still lags in many other countries, including the U.S., where TV remains the dominant medium. A recent report by eMarketer forecast that digital would finally overtake TV in the U.S. by 2018.

Still, the survey notes that Canadian digital publishers are concerned about the rise of so-called “programmatic buying,” automated ad sales occurring in real time that are efficient but cut into margins. “By eroding publisher leverage, this has put significant downward pressure on display CPMs,” the survey says, using the industry term for the rates paid by advertisers to target a given number of consumers.

Canadian online advertising is dominated by the Search category, which includes giants such as Google. The category pulled in $1.7-billion, or almost 50 per cent of all digital media ad revenue. While that was up six per cent from 2012, the category’s growth is slowing after years of double-digit leaps.

Display advertising, such as banner ads, was down about four per cent, to $938-million, marking the first drop in that category after decades of growth.

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