Total payments for the placement of advertisements increased by 5% in 2024 compared with a contraction of approximately 3% the previous year, measured at constant prices. The turnaround is explained by increased spending on advertising in foreign media. Payments to foreign media rose by approximately eleven percent, while advertising revenues of domestic media contracted slightly between 2022 and 2023. The share of foreign media in total advertising expenditure has never been higher. Overall, advertising purchases in both domestic and foreign media have more than doubled since 2009, calculated at constant 2024 prices. This growth can be attributed almost entirely to spending on foreign media, which has increased nearly twenty-sixfold over the same period, whereas payments to domestic media have increased by a modest 8%.
Total payments for advertising purchases in 2024 amounted to 29.4 billion ISK, compared with 28 billion ISK in 2023, at constant prices, representing a 5% year-on-year increase. Slightly more than half (51%), or nearly 15 billion ISK, of the funds allocated to advertising in Iceland in 2024 went to foreign media, compared with 14.4 billion ISK to domestic media (49%). Payments to foreign media have increased nearly twenty-sixfold over the same period, while payments to domestic media have grown by 8%. Payments to foreign media rose by just over 11% between 2023 and 2024, while advertising expenditure in domestic media decreased by 1%. Since, 2009, or as far back as information is available, payments to foreign media have increased nearly 26-fold, while payments to domestic media have grown by 8%. The figure below illustrates the development of payments for advertising both domestically and abroad from 2009–2024 at constant prices.
Since 2013, an increasing proportion of advertising funds has flowed to foreign media. It has now reached the point where little over a half of advertising funds (51%) are directed to foreign entities, as the figure below demonstrates.
A substantial portion of the amount spent on advertising in foreign media is directed toward web advertising, social media, and search engines. Data on the distribution of payments to individual entities are not available. Nevertheless, it can be assumed that a significant share of the funds that Icelandic advertisers allocate to foreign media is directed to two companies, Alphabet (Google and YouTube) and Meta (Facebook and Instagram). In 2024, these two entities accounted for 97% of payments for advertisements made via credit card transactions only. To further illustrate the concentration of advertising spending in foreign media, the third-largest entity, Microsoft (LinkedIn), held a market share of 1.7%. Credit card payments account for approximately half of the total service imports related to advertising and associated activities.
It should be emphasised that only a portion of the funds flowing to foreign media is for advertising targeted at Icelandic consumers. The outflow of advertising funds can only partly be considered at the expense of domestic media. It is likely that this outflow stems from two interconnected factors. First, the emergence and rapid spread of social media has facilitated more efficient use of advertising funds by reaching larger and more clearly defined consumer groups than traditional media. On the other hand, increased outflow of advertising funds can also be attributed to marketing of the tourism industry abroad. The precise distribution between advertising directed at domestic and foreign consumers remains uncertain.
The development of the Icelandic advertising market in 2024 was broadly similar to trends in the Nordic countries. Following a contraction in 2023, it is estimated that growth in the Nordic advertising market, excluding Iceland, averaged 4-5% in 2024, roughly the same as in Iceland. Only Finland experienced a slight decline. This generally represents slower growth than the global market, which is estimated to have grown by 11% year-on-year (IRM, Advertising Investment (€) 2021–2024 in 92 Countries).
The division of advertising expenditure between domestic and foreign media in Iceland is broadly similar to that in the Nordic countries. The figure below shows this distribution for the years 2016–2024. The share of advertising funds flowing to foreign media has steadily increased throughout the period across all Nordic countries. Developments in Iceland have paralleled trends in Denmark and Finland, but less so in Sweden, where the outflow of advertising funds has been relatively higher in recent years, and in Norway, where foreign media have until recently captured a significantly smaller share of the advertising payments.
Advertising expenditure in domestic media decreased by 1.2% between 2023 and 2024, or approximately 176 million ISK at constant prices. This represents a reversal compared with 2022–2023, when payments to domestic media declined by 1.3 billion ISK, equivalent to an 8% contraction. Over the longer term, payments to domestic media in 2024 were approximately one-quarter lower than in 2016. Looking further back, revenues of Icelandic media were more than 40% lower in 2024 than in 2007, when they peaked shortly before the 2008 financial crisis. The figure provides an overview of advertising revenue trends for domestic media from 2009–2024, expressed as an index at both variable and constant prices.
In 2024, roughly 60% of advertising funds were allocated to four media categories: television (21%), the web (20%), radio (18%), and out-of-home media (18%). Daily and weekly newspapers were the fifth-largest category (14%). The share of other media in advertising revenue was considerably smaller. In recent years, the proportion of daily and weekly newspapers, historically the most significant advertising channels, has declined sharply, due partly to the emergence and expansion of the web and online media and partly to a general contraction in newspaper circulation, readership, and the number of titles published. A notable factor was the cessation of the free newspaper Fréttablaðið in early 2023. The paper had been one of the most active advertising platforms since its founding in 2000. The reduction in the number of media has only partially benefited the remaining outlets in terms of increased advertising revenue. Of particular note, the share of out-of-home advertising has steadily grown in recent years. By 2024, out-of-home advertising accounted for 18% of domestic media advertising revenue, equal to the share of radio. A similar trend applies to podcasts, which have captured 3% of advertising revenue within a few years.
The relative distribution of advertising revenue across different types of media in the Nordic countries and globally is shown in the table below. Percentages are derived from combined domestic and foreign payments. There are various challenges in obtaining comparable data across countries. For some countries, figures refer to advertising revenue, whereas for others, data are based on advertising expenditure. The Icelandic advertising market has some distinctive characteristics in terms of the allocation of advertising revenue among media types compared with the Nordic countries. Notably, the share of radio is much higher in Iceland than elsewhere. In recent years, the Icelandic advertising market has increasingly resembled the Nordic norm in terms of the proportional allocation of advertising funds across media, although historically radio has held an unusually strong position at the expense of television, and the web has been a weaker advertising medium than typically observed in the Nordic region.
About the data
Information on media advertising revenues is obtained from annual reports and operator submissions to the Icelandic Media Commission from 2011. In cases where operator data are missing, advertising revenues are estimated based on value-added tax. It should be noted that figures on advertising revenue are always partially estimated. Statistics from Statistics Iceland on media advertising revenues do not include product lists, direct marketing, or mailings. Sponsorship revenues are included in advertising revenues. Previously published information has been revised with access to new or unknown data. Information on payments for advertisements in foreign media and related services is derived from data on service imports and credit card transaction records.