AdEx Benchmark 2014 About the study A meta analysis of online ad - PowerPoint PPT Presentation

IA IAB B Europe AdEx Benchmark 2014

About the study

A meta analysis of online ad spend in Europe RATECARD NET GROSS Revenue Billed Campaigns x Revenue Billed No Agency commissions Ratecard

Submissions from 27 European countries • Austria • Netherlands • Belarus* • Norway • Belgium • Poland • Bulgaria • Russia • Czech Republic • Romania • Croatia • Serbia • Denmark • Slovakia • Finland • Slovenia • France • Spain • Germany • Sweden • Greece • Switzerland • Hungary • Turkey • Ireland • UK • Italy *New participant from 2014

Big Picture and Context

The value of European online advertising in 2014 € 30.7bn

2014: Eurozone macro-recovery provides foundation for ad growth 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 Eurozone 2007-Q3 GDP growth in Eurozone (%) 2008-Q1 2008-Q3 2009-Q1 France 2009-Q3 2010-Q1 2010-Q3 Italy 2011-Q1 2011-Q3 Germany 2012-Q1 2012-Q3 2013-Q1 2013-Q3 2014-Q1 2014-Q3 2015-Q1 -8 -6 -4 -2 0 2 4 6

Double-digit online advertising growth in 2014 Total online advertising spend ( € bn) 35.0 30.7 11.6% like-for-like 30.0 27.4 25.0 20.0 15.0 10.0 5.0 0.0 2013 2014

Online advertising spend has doubled in the last five years… Total online advertising spend ( € bn)* 35.0 30.7 30.0 27.4 24.4 25.0 21.9 18.8 20.0 15.8 14.5 15.0 9.2 * Source: IAB Europe 10.0 6.6 for 2011-2014; 2006- 2011 retropolated 5.0 based on IHS growth rates 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014

…while maintaining double -digit growth for five consecutive years Online advertising year-on-year growth (%) 20.0% 19.0% 18.0% 16.5% 16.0% 14.0% 11.9% 11.6% 11.5% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2010 2011 2012 2013 2014

Online growth rescued overall European advertising market in 2014 2014: advertising year-on-year growth (%) 20.0% 13.8% 15.0% 11.7% 11.4% 10.0% 5.0% 3.0% 1.8% 0.0% 0.0% WE CEE Total Europe -1.6% -5.0% -5.0% -10.0% -9.5% -15.0% Total excluding online Online Total

In Western Europe, online advertising spend per head for the first time exceeded spend on all other media in 2014 Ad spend per capita in 2014 ( € ) 70.0 59.9 58.7 60.0 50.0 43.6 39.8 40.0 30.0 22.2 20.0 11.3 10.0 - WE CEE Total Europe TV Print Online Other

Strong growth puts size of online ad market nearly on par with TV Ad spend by category in Europe in 2014 ( € bn) TV 33.5 Online 30.7 Print 26.8 OOH 7.8 Radio 5.2 Cinema 0.7 - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Markets

Over half of all European online ad spend comes from three markets; contribution by top 10 to total market stable Share of European online ad revenue by market (%) 100% 90% 86.6% 86.4% 86.5% 78.8% 78.2% 77.9% 80% 70.8% 69.9% 69.4% 70% 58.8% 57.3% 56.9% 60% 50% 40% 30% 20% 10% 0% Top 3 Top 5 Top 7 Top 10 2012 2013 2014

Top 10 European online advertising markets at a glance Total online ad spend ( € m) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2013 2014

advertising in 2014… All European markets recorded positive growth in online 10% 15% 20% 25% 30% 35% 40% 45% 50% 0% 5% Slovenia 43.1% Ireland 33.3% Belarus 32.8% Turkey 20.8% Hungary 19.5% Online ad growth like-for-like in 2014 (%) Bulgaria 18.7% Russia 17.3% Greece 16.3% Austria 16.0% Belgium 16.0% Slovakia 14.7% UK 14.3% Switzerland 13.8% Sweden 13.3% Finland 12.7% Italy 12.0% Europe 11.6% Netherlands 11.4% Denmark 11.2% Croatia 10.8% Serbia 9.5% Germany 9.3% Norway 8.4% Poland 7.8% Czech 7.7% France 6.6% Romania 2.3%

…and 20 markets grew double -digit 40% 35% Belarus Ireland 30% 25% Hungary Turkey 20% Bulgaria Russia Belgium Slovakia Austria Croatia UK 15% Switzerland Greece Sweden Finland Italy Netherlands Denmark 10% Germany Norway Poland Czech Republic France 5% Romania 0% - 20 40 60 80 100 120 140 -5% -10%

Growth drivers Social media Video Programmatic transactions and data infrastructures Improved data literacy on both demand and supply side Mobile internet penetration increasing across all of Europe Measurement initiatives in mobile and video taking effect

Growth hurdles Viewability and fraud Some cannibalization of desktop budgets by mobile CPM/CPC inflation Limited inventory in video Attribution Measurement issues remain despite improvements

Formats

Display drove online advertising growth in 2014 Year-on-year growth (%) 18% 15.5% 16% 15.2% 14.9% 14% 13.0% 11.9% 11.5% 11.6% 12% 10.8% 10% 9.1% 8% 6.3% 5.8% 6% 3.6% 4% 2% 0% Display Classifieds & Paid-for-search Total Directories 2012 2013 2014

Display grew its share, eating into both Paid-for-search and Classifieds & Directories Format shares of online (%) 100% 90% 34.1% 36.6% 36.6% 80% 47.3% 48.0% 47.1% 48.8% 48.1% 49.2% 70% 60% 18.3% 14.9% 18.9% 50% 15.9% 19.8% 19.6% 16.8% 20.7% 18.5% 40% 30% 48.2% 47.5% 43.8% 20% 35.6% 33.8% 32.7% 32.2% 32.4% 31.0% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Display Classifieds & Directories Paid-for-search Other

across markets Display showed uneven growth with a 40 percentage point range -10% 10% 15% 20% 25% 30% 35% 40% -5% 0% 5% Ireland 35.1% Slovenia 34.1% Turkey 29.4% UK 26.4% Sweden 23.4% Display advertising growth year-on-year (%) Austria 23.3% Belarus 22.5% Finland 18.6% Italy 17.4% Belgium 16.2% Bulgaria 15.8% Hungary 15.5% Europe 15.2% Norway 14.5% Denmark 13.4% France 12.9% Netherlands 12.1% Slovakia 11.5% Switzerland 10.4% Greece 10.2% Germany 9.1% Serbia 8.3% Poland 7.3% Czech Republic 4.5% Romania 1.2% Croatia -3.1% Russia -5.0%

Video is now an integral part of online display advertising 10% 15% 20% 25% 30% 35% 0% 5% Slovenia 30.6% Switzerland 26.8% Russia 25.3% Belgium 23.3% Bulgaria 22.3% UK 18.0% Greece 17.7% Sweden 17.2% Video share of Display (%) Netherlands 16.4% Poland 16.1% France 15.6% Europe 15.1% Ireland 14.6% Norway 13.7% Germany 13.6% Croatia 12.7% Turkey 11.7% Austria 11.4% Italy 11.2% Finland 8.7% Czech Republic 7.0% Hungary 5.8% Denmark 5.4% Romania 3.9% Belarus 3.0%

Video growth is at least double-digit in all markets 100% 120% 140% 160% 180% 200% 20% 40% 60% 80% 0% Greece 187.5% Hungary 143.5% Austria 115.3% Belarus 100.0% Ireland 62.5% Video growth year-on-year in 2014 (%) Denmark 60.1% Sweden 59.0% Switzerland 57.9% Romania 56.2% Norway 53.7% Turkey 48.1% UK 42.1% Russia 42.1% Slovenia 40.0% Europe 35.8% Netherlands 30.4% Bulgaria 30.1% France 28.8% Poland 28.2% Germany 27.9% Czech Republic 24.2% Finland 22.2% Italy 17.5% Belgium 17.0%

Mobile consolidates its position as key driver of display advertising 10% 15% 20% 25% 30% 35% 40% 0% 5% UK 33.8% Ireland 24.5% Norway 21.7% Europe 17.7% Mobile display as a share of total Display (%) Italy 17.7% Netherlands 15.4% Russia 15.2% France 14.6% 2012 Sweden 12.9% Hungary 11.1% Austria 2013 10.0% Finland 9.0% Germany 7.8% 2014 Denmark 6.5% Poland 6.4% Serbia 5.4% Croatia 5.4% Slovenia 5.1% Turkey 3.4% Czech Republic 2.1% Belarus 1.6% Bulgaria 1.3% Romania 1.0%

This is more evident… -10% 10% 15% 20% 25% 30% 35% 40% -5% 0% 5% Ireland 35.1% Slovenia 34.1% Turkey 29.4% UK 26.4% Sweden 23.4% Austria 23.3% Display year-on-year growth (%) Belarus 22.5% Finland 18.6% Italy 17.4% Bulgaria 15.8% Display Hungary 15.5% Norway 14.5% Denmark 13.4% France 12.9% Netherlands 12.1% Germany 9.1% Serbia 8.3% Poland 7.3% Czech Republic 4.5% Romania 1.2% -3.1% Croatia -5.0% Russia

…when we remove Mobile from Display Display year-on-year growth (%) 40% 30% 20% 10% 0% Ireland Slovenia Turkey UK Sweden Austria Belarus Finland Italy Bulgaria Hungary Norway Denmark France Netherlands Germany Serbia Poland Czech Republic Romania Croatia Russia -10% -20% Display Display excluding Mobile

Mobile was responsible for 50% of market growth European European Display with Display without mobile: +15.2% mobile: +7.9%

experiencing decline Classifieds & Directories struggled in 2014 with 11 countries -60% -40% -20% 20% 40% 60% 80% 0% Croatia 65.0% Belarus 50.0% Bulgaria 44.7% Classifieds & Directories year-on-year growth in 2014 Hungary 32.5% Serbia 20.1% Slovakia 20.1% Slovenia 20.0% Switzerland 12.5% UK 11.6% Germany 10.7% Belgium 10.0% Netherlands 7.9% Turkey 6.5% Europe 5.8% Denmark 5.5% Austria 5.3% France 3.0% Poland 2.5% Finland 0.0% Greece 0.0% Russia 0.0% Czech Republic -1.2% Ireland -3.6% -6.1% Norway Sweden -7.2% -16.6% Italy Romania -51.6%