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Paid search advertising grew again in 2022 – just not as much as it did in 2021.

In total, search accounted for $84.4 billion of the $209.7 billion in U.S. digital advertising revenues, according to the IAB’s Internet Advertising Revenue Report: Full Year 2022, released today.

As has also been the case in prior years, the IAB pointed out that the growth of search revenues wasn’t as strong as other formats – it lost 1.2 percentage points in total revenue share. That’s because display revenues were up 12%, digital video was up 19.3% and digital audio was up 20.9%, year on year.

Why we care. As we knew it would be, 2022 was a challenging year due to an uncertain economy, geopolitical unrest, regulation, measurement challenges and a host of other factors. Although digital advertising revenue growth slowed, revenues increased year on year.

Paid search remains king. With 40.2% of all digital ad revenue in 2022, paid search is still the leading format. However, according to the IAB:

• “Innovation of AI programs such as ChatGPT are also changing the utility of search, with Microsoft/Bing and Alphabet/Google investing significant resources in this area.”

Paid social plateaus. After rebounding in 2021, social media saw its smallest level of growth in 10 years, according to the IAB. In 2022, revenue from social platforms was $59.7 billion, up from $57.7 billion in 2021. Apple’s App Tracking Transparency (ATT) feature was cited as one key reason for stalled growth.

The state of digital advertising. Call it resilient. Of note from the IAB report:

• Total U.S. digital ad revenue increased by $20.4 billion in 2022.
• Q1 had the highest growth (21.1%) followed by Q2 (11.8%).
• Ad revenues for the first half of 2022 surpassed $100 billion for the first time. 

2023 outlook. “Promising” is the word IAB used, while adding an important “if”:

“The industry’s outlook for 2023 will be promising if it can comply with evolving privacy regulations and adapt to growing consumer usage patterns and expectations, such as ad-supported streaming and retail media. These factors, compounded with economic uncertainty, underscores the importance of finding alternative, efficient ways to reach and measure audiences with fewer identifiers.”

The report. You can view the entire report here (note: the report is free, but you must log in or create an account to download it).

Dig deeper:

• U.S. search ad revenue grew 33% to $78 billion in 2021
• Online ad revenue was almost $125 billion in 2019 but growth is slowing
• IAB: U.S. search spend grew 19% in 2018, but its share of digital ad spend ticked down, again
• IAB: Search, the largest category of digital ad spending, generated $40.6B in 2017
• IAB: Paid search was 48 percent of total digital spend in 2016
• IAB: desktop and mobile paid search bring in roughly half of 2015 digital ad revenue

The post U.S. search ad revenue hit a record $84.4 billion in 2022 appeared first on Search Engine Land.