New figures show that digital advertising spend in the Irish market reached €726m last year, up 8% compared to 2019.
The latest IAB PwC Online Adspend report shows that online display advertising grew 12% to €367m in 2020, with social and video the primary drivers.
Search advertising grew by 5% to €321m.
The figures show that spend on digital advertising, excluding social, search and classified, declined by 10% last year.
Suzanne McElligott, CEO of IAB Ireland, said 2020 was a challenging year for the advertising industry.
However she said the pandemic has resulted in digital becoming increasingly important for many people.
"The 5% growth in search and 12% growth in display advertising reflect advertisers use of digital to maintain engagement with their customers during these uncertain times.
"The strong 12% growth in display has been driven by video and social formats and we are very conscious that many of our members did not experience growth in 2020," she added.
As Covid-19 restrictions begin to ease, the findings show that IAB Ireland adspend participants predict a 10-20% increase in planned digital ad spend this year.
"We look forward to a better year for the Irish advertising industry," Ms McElligott said.
David Monaghan, Chairman of IAB Ireland Board and Head of Commercial News UK, said that during periods of lockdown last year, IAB Ireland's publishers reported an average increase of 11% in unique users, 17% increase in page views in 2020 with average time spent on site up 16%.
"This strong growth in digital audiences signals that our members are well placed to respond to the opening up of our economy in coming months and the take off of advertising," he said.