More than four of every ten ISK paid for advertisements in Iceland in 2021 went to foreign media. Total payments to the media for display of advertisements approached 22 billion ISK, thereof 9.5 billion ISK were paid to foreign media, or 44%, and 12.3 billion ISK to domestic media, or 54%. Advertising expenditure increased in 2021 about one fifth after the economic recession following the Covid-19 pandemic in the previous year. Advertising expenditure in 2021 was comparable with the expenditure in 2018, in real fixed prices.

In recent years, advertisement payments to foreign media have increased near continuously. Estimated volume of payments for advertisements in foreign media, almost entirely on the web and online, amounted to around 9.5 billion ISK in 2021 compared with less than 5 billion ISK in 2013, in fixed prices. The share of individual companies of the total expenditure is not known, but credit cards payments to foreign companies for advertisement services and related activities, which amount to half of the total advertising payments to actors abroad, reveal that Facebook and Google received together 95% of the credit card transactions only.

In 2021, advertising revenue of the domestic media increased some 14% compared with a 10% slump in aftermath of the pandemic in 2020, signifying a rise of about 1.5 billion ISK, or from 10.8 billion ISK to 12.3 billion ISK, in fixed prices. This equals an increase of nearly 14%, compared with 34% increase in payments to foreign media. In real prices, the advertisement revenue of the domestic media in 2021 were on a pair with the years 2011-2015. Overview of the trend of advertising revenue of the domestic media in the years 1996–2021 is depicted in the figure below, shown as indexes in current and fixed prices.

Nearly 30% of payments for advertisements in the domestic media in 2021 went to daily and weekly newspapers, which are the single largest advertising medium in Iceland. Second most important was television (20%), then the web (18%) and radio (17%). Share of other media was significantly lower.

Since 1996, the division of the advertising revenue share between different kinds of media has changed, largely at the expense of dailies and weeklies whose share has lowered from 57% down to 27% of the total. This can largely be explained by two interrelated factors. On one hand to the advent and increased importance of the web media and, on the other hand to general downturn in circulation and reading of newspapers.

To begin with the weight of the web media as an advertising medium was limited. Since in the 2010s, the importance of the web as an advertisement medium has increased slowly but surely. Today the web retains 18% of the total advertising revenue of the domestic media. 82% of the advertising revenue online goes to media’s web sites, compared with independents receiving 18%.

The Icelandic advertising market displays some important and particular traits compared with the other Nordic countries as can be seen in the table below.

Newspapers and radio in Iceland capture generally higher share of the advertisement revenue of the media than in the other Nordic countries. This discrepancy owes much to different historical circumstances and developments. The public service broadcaster, RÚV, has from its inception in 1930 been allowed to carry advertisements, first in radio and later in television as well.

Likewise, the unequally strong position of newspapers on the advertising market in Iceland compared with the other Nordic countries can be related to the fact that the daily national papers cater to the population mostly independent of residence. Moreover, free newspapers are much more important in Iceland than in most other countries, both as regards distribution and reading, which in turn increases their importance as a courier for advertisements.

About the data
Information about advertising revenue of the media are derived from annual accounts and according to information from The Icelandic Media Commission from 2011 and onwards (previously from Statistics Iceland). In the instances when information is lacking from media operators the advertising revenues are estimated from VAT tax reports. Hence, it must be kept in mind that the figures are partly based on estimates. The data do not include catalogues and directories, direct marketing, and direct and multiple mail, or advertising on non-domestic web sites. Sponsoring is included.

Information about payments to foreign media are derived from the databases of payments for import of services and credit cards payments for services.