Online Ad Revenues Blow Past Broadcast TV, Thanks To Mobile And Video

Perhaps the iconic pose of our era is someone squinting at a smartphone screen--replacing another iconic pose, the couch potato pointing a remote at the TV screen.

That stark change is apparent in a new report that says for the first time, Internet ad revenues have passed those of broadcast TV. Not all of TV, mind you. While online ad sales, which rose 17% to hit $42.8 billion last year, according to the report from the industry group Interactive Advertising Bureau, had already passed cable TV, broadcast and cable combined still dwarf online ads at $66 billion.

Still, the report marks a milestone, reflecting the fact that people are spending ever more time online--especially on their phones. Less than two years ago, it seemed as if the arrival of the smartphone as a primary means to access communications and entertainment was going to destroy or at least cap the growth of online giants such as Google and Facebook. Now, after years of predictions that the year of mobile advertising was at hand, they've finally come true.

Mobile advertising revenues jumped 110%, to $7.1 billion, according to the IAB report, prepared by  PricewaterhouseCoopers . That's the third year of triple-digit growth for the category, which includes multiple formats such as display, search, and so-called native ads. “Our survey confirms that we are fully in transition to the post-desktop era,” PwC partner David Silverman said in the release. “Triple digit advertising revenue growth from mobile devices contrasted the more tepid 8 percent growth from traditional computer screens.”

Digital video ads on Google's YouTube and elsewhere also continue to grow, though at a 19% rise, not quite as fast as in recent years. Online video ad revenues, at $2.8 billion, hit 7% of the total to become the fourth-largest category, just behind mobile ads, now at 17%.

Search ads, dominated by Google, remain the top category at $18.4 billion, while display ads reached $7.9 billion. But both are growing much more slowly than mobile and digital video ads--search at 8.6% and display at 7%.

As television networks slowly move their shows online and people view them on multiple screens, the lines between online and TV ads may blur, making the distinction less meaningful. Indeed, one of the key focuses of advertisers today is how best to advertise across screens.

A new study by Google, for instance, indicates that people search a lot for shows online, even months before a new show premieres or a new season starts, and try to catch up on shows online an average of two months before a new season begins. What's more, searches continue at a relatively high level for weeks after a premiere or new season starts. That suggests that networks and studios will have to find ways to better coordinate ad campaigns in different media.