European Digital Advertising Data and Trends Constantine Kamaras - PowerPoint PPT Presentation

European Digital Advertising Data and Trends Constantine Kamaras Chairman, IAB Europe

About the study

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

Data for 27 countries in Europe • 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

Big Picture

Europe: the value of online advertising in H1 2017 €22.5bn

Online advertising grew by 11.5% in H1 2017 Online advertising spend in Europe (€bn)* 25 22,5 +11.5% like-for-like 20,2 20 15 10 5 0 H1 2016 H1 2017 Source: IAB Europe & IHS Markit

€2.3bn added in H1 2017 across 3 formats: display grows fastest, search maintains lead, classifieds & directories relatively slower Online Ad Spend by Format Share of Total by Format Net Additions by Format (€bn) (€bn) 2.3 25 100% 12,0 1,2 10,0 20 80% 47,2% 47,8% 10,7 8,0 1,0 9,5 15 60% 6,0 16,0% 14,9% 10 3,4 40% 3,2 4,0 0,1 5 20% 37,3% 36,8% 8,4 2,0 7,4 0 0,0 0% Display Classifieds & Search H1 2016 H1 2017 H1 2016 H1 2017 Directories Search Classifieds & Directories Display Display Classifieds & Directories Search H1 2016 H1 2017 net additions Source: IAB Europe & IHS Markit

Online video reaches 20% of total display spend as it grows 3.2x faster than non-video display to €1.7bn in H1 2017 Display by Format H1 2017 Growth by Share of Display Total (€bn) Display Format 9,0 100% 35% 17,2% 19,9% 8,0 30,5% 1,7 80% 30% 7,0 1,3 6,0 25% 60% 5,0 20% 4,0 82,8% 40% 80,1% 15% 6,7 6,1 3,0 9,5% 10% 2,0 20% 5% 1,0 0,0 0% 0% Non-Video Video H1 2016 H1 2017 H1 2016 H1 2017 Display Non-Video Display Video Non-Video Display Video Source: IAB Europe & IHS Markit

The expansion of video drives the share gains of total display H1 2016 H1 2017 Non-Video Non-Video Display Display 30,4% 29,9% Total Total Search Display: Display: Search 47,2% €20.2b 36.8%* 37.3% €22.5b 47,8% n n Video Video 6,3% 7,4% Classifieds & Classifieds & Directories Directories 16,0% 14,9% Non-Video Display Video Classifieds & Directories Search Non-Video Display Video Classifieds & Directories Search *share of total display slightly higher than sum of sub-formats due to rounding Source: IAB Europe & IHS Markit

Mobile ad spend reaches nearly €7bn in H1 2017 Mobile Ad Spend (€bn) 8,0 6,8 7,0 6,0 4,8 5,0 4,0 3,4 3,3 3,0 2,5 2,3 2,0 1,0 0,0 Mobile Display Mobile Search Total Mobile H1 2016 H1 2017 Note: (1) Mobile display is excluding Belgium, Greece, Slovakia, Slovenia, Switzerland. (2) Mobile search is excluding Belgium, Bulgaria, Croatia, Denmark, Finland, Greece, Netherlands, Norway, Romania, Slovakia, Slovenia, Switzerland. (3) Total may not exactly correspond to subcategories due to rounding. Source: IAB Europe & IHS Markit

More than 1/3 of online ad spend is on mobile in H1 2017 Display Search Total 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% 61,0% 62,6% 63,8% 69,7% 70,2% 70,0% 60% 60% 60% 50% 50% 50% Share of format Share of format Share of format 40% 40% 40% 30% 30% 30% 20% 20% 20% 39,0% 37,4% 36,2% 30,3% 30,0% 29,8% 10% 10% 10% 0% 0% 0% H1 2016 H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 Mobile Desktop Mobile Desktop Mobile Desktop Note: shares based on extrapolation of mobile data to all countries Source: IAB Europe & IHS Markit

Regional comparison of online ad spend by format Central & Eastern Europe (CEE) Western Europe (WE) H1 2017 H1 2017 Non-Video Display Non-Video 28,7% Display Search 37,8% Total 44,5% Display: Total Search 36.3%* Display: 48,3% €19.5b 43.9%* €3.0bn n Video 7,6% Video Classifieds & Classifieds & 6,1% Directories Directories 11,7% 15,4% Source: IAB Europe & IHS Markit

Mobile exhibits similar trajectories in WE & CEE Western Europe (WE): Mobile Ad Central & Eastern Europe Spend (€bn) (CEE): Mobile Ad Spend (€bn) 7,0 0,7 0,7 6,1 6,0 0,6 0,5 5,0 0,5 4,3 0,4 4,0 0,4 3,0 3,0 0,3 0,3 3,0 0,3 2,2 2,1 0,2 2,0 0,2 1,0 0,1 0,0 0,0 Mobile Display Mobile Search Total Mobile Mobile Display Mobile Search Total Mobile H1 2016 H1 2017 H1 2016 H1 2017 Note: (1) Mobile display is excluding Belgium, Greece, Slovakia, Slovenia, Switzerland. (2) Mobile search is excluding Belgium, Bulgaria, Croatia, Denmark, Finland, Greece, Netherlands, Norway, Romania, Slovakia, Slovenia, Switzerland. (3) Total may not exactly correspond to subcategories due to rounding. Source: IAB Europe & IHS Markit

Outlook to full year 2017 • Relative weight of 2016 2017 Forecast In a stable macro-environment, online ad spend H1 typically has marginally lower 50 weight in terms of its contribution 45 to full-year online ad spend. ~€46bn • 40 H2 is fueled by the traditionally important Q4 Christmas 35 business. • 30 Assuming a slight slow-down in H2 growth to 10%, we estimate 48,1% 25 51,9% the 2017 market to arrive at in the region of €46bn. 20 • Factoring in measurement 15 artifacts*, full-year growth for 10 2017 is likely to be between 9.5% and 11%. 5 * (1) Only a minority of national IABs report half-year data, and often less granular than their full year reports; H1 H2 0 (2) We need to rely on estimates and our proprietary 2016 2017 database to a higher degree instead; (3) Measurement methods & survey scope of national IABs may change for full year 2017. H1 H2 Source: IAB Europe & IHS Markit

Contact: Alison Fennah – fennah@iabeurope.eu Marie-Clare Puffett – puffett@iabeurope.eu Daniel Knapp – daniel.knapp@ihsmarkit.com Connect with us: @IABEurope IAB Europe @IHS4Tech www.iabeurope.eu www.technology.ihs.com