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U.S. search ad revenues hit record $88.8 billion in 2023
Posted On 18 Apr 2024
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Search continues to account for the largest share of digital ad spending. Search revenue grew 5.2% year on year.
Paid search advertising revenues reached a new high in 2023 – though annual growth continues to slow, according to a new report.
In total, search accounted for $88.8 billion of a record $225 billion in U.S. digital advertising revenues, according to the IAB Internet Advertising Revenue Report: Full Year 2023, conducted by PwC. That figure represents a $4.4 billion increase over 2022.
Why we care. Paid search becomes more expensive and challenging every year, with less transparency. But advertisers continue to embrace paid search for one simple reason: it drives results for brands and businesses.
Paid search is still king. Search continues to own the largest market share of advertising – 39.5%, but that is down from 40.2% in 2022, 41.4% in 2021 and 42.2% in 2020.
- But YoY growth for search advertising is slower than the digital industry as a whole and the majority of other ad formats, according to the report.
The state of digital advertising. Resilient. Advertising continued to grow in a time of high inflation, rising interest rates and job cuts, according to the report. Of note from the IAB report:
- Q4 had the highest growth rate – 12.3% – with revenues growing to $64.5 billion. In 2022 the growth rate for the quarter was 4.4%.
- Social media ad revenue rose 8.7% YoY to reach $64.9 billion in 2023, with much of that growth coming in the second half of the year.
- Video advertising accounted for $52.1 billion, or 23.2% of all advertising revenue, in 2023.
- Display advertising revenues remained high in 2023 – $66.1 billion – though YoY growth was 4%, down from 12% growth in 2022.
- Retail media networks saw a 16.3% increase in revenue YoY, reaching $43.7 billion.
2024 outlook. It’s “promising,” according to the IAB. Advertisers must, as always, adapt to changing consumer behaviors, consumption channels, privacy regulations and the ongoing generative AI revolution.
