AdEx Benchmark 2015 Interact Presentation

11th May 2016

Daniel Knapp, IHS

Eleni Marouli, IHS

About the study

A meta analysis of online ad spend in

Europe

RATECARD

Campaigns x

Ratecard

GROSS

Revenue Billed

NET

Revenue Billed

No Agency commissions

Submissions from 27 countries in Europe

• Austria

• Belarus

• Belgium

• Bulgaria

• Czech Republic

• Croatia

• Denmark

• Finland

• France

• Germany

• Greece*

• Hungary

• Ireland

• Italy

• Netherlands

• Norway

• Poland

• Russia

• Romania*

• Serbia

• Slovakia

• Slovenia

• Spain

• Sweden

• Switzerland

• Turkey

• UK

*Have not submitted in time for Interact, but will be included in the final report

Big picture and context

The value of online advertising in 2015

€36.2bn

Acceleration in European GDP growth in

2015 boosts the online ad market

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

200

4-Q

1

200

4-Q

2

200

4-Q

3

200

4-Q

4

200

5-Q

1

200

5-Q

2

200

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3

200

5-Q

4

200

6-Q

1

200

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2

200

6-Q

3

200

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4

200

7-Q

1

200

7-Q

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7-Q

3

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7-Q

4

200

8-Q

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200

8-Q

2

200

8-Q

3

200

8-Q

4

200

9-Q

1

200

9-Q

2

200

9-Q

3

200

9-Q

4

201

0-Q

1

201

0-Q

2

201

0-Q

3

201

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4

201

1-Q

1

201

1-Q

2

201

1-Q

3

201

1-Q

4

201

2-Q

1

201

2-Q

2

201

2-Q

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201

2-Q

4

201

3-Q

1

201

3-Q

2

201

3-Q

3

201

3-Q

4

201

4-Q

1

201

4-Q

2

201

4-Q

3

201

4-Q

4

201

5-Q

1

201

5-Q

2

201

5-Q

3

201

5-Q

4

201

6-Q

1

Eurozone France Italy Germany Spain

GDP growth in Eurozone (%)

Source: IHS

© 2016 IHS

€30bn net addition to the online ad market in

10 years…

6.69.2

14.5 15.818.8

21.924.4

28.632.1

36.2

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012 2013 2015 2015

Total online advertising spend (€bn)

Source: IAB Europe for 2011-2015; 2006-2011 retropolated based on IHS growth rates

CAGR (2006-2015): +20.5%

€30bn

…in an otherwise flat media advertising

market

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Digital Traditional

Ad spend by category in Europe in 2015 (€bn)

Source: IAB Europe for online and IHS for all other media

© 2016 IHS

Double-digit growth throughout excluding

blip in 2009

39.0%

58.6%

8.9%

18.6% 16.5%11.5% 11.9% 11.6% 13.1%

0%

10%

20%

30%

40%

50%

60%

70%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Online advertising year-on-year growth (%)

Source: IAB Europe and IHS

Online lifts a declining media advertising

market in 2015

1.0%

-28.2%

-3.9%

12.9%15.9%

13.1%

4.8%

-19.5%

1.1%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Western Europe CEE Total Europe

Total excluding online Online Total

2015: advertising year-on-year growth (%)

Source: IAB Europe for online and IHS for all other media

Online overtakes TV to become the largest

advertising medium in Europe

0.7

5.2

7.5

25.5

33.3

36.2

0 5 10 15 20 25 30 35 40

Cinema

Radio

OOH

Print

TV

Online

2015 2014

Ad spend by category in Europe in 2014 and 2015 (€bn)

Source: IAB Europe for online and IHS for all other media

Markets

Top three markets still account for the lion’s

share of the European online advertising

market

60.4%

70.5%

78.4%86.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Top 3 Top 5 Top 7 Top 10

2012 2013 2014 2015

Share of European online ad revenue by market (%)

Source: IAB Europe and IHS

824

829

1,234

1,310

1,541

1,585

2,085

4,227

5,794

11,826

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Switzerland

Denmark

Spain

Sweden

Russia

Netherlands

Italy

France

Germany

UK

2015 2014

Top 10: total by country in 2014 and 2015 (€m)

Source: IAB Europe and IHS

Top 10 online ad markets at a glance

Strong growth across Europe in 2015…2

9.0

%

22

.3%

21

.8%

21

.6%

20

.4%

20

.0%

19

.7%

18

.7%

18

.2%

18

.0%

16

.9%

15

.3%

14

.2%

13

.7%

13

.3%

13

.1%

12

.8%

11

.2%

10

.4%

9.7

%

8.4

%

8.0

%

7.6

%

7.5

%

6.8

%

5.6

%

0%

5%

10%

15%

20%

25%

30%

35%

Ire

land

Bulg

aria

Pola

nd

Slo

ven

ia

Slo

vakia

Sw

ede

n

Tu

rkey

Sw

itze

rla

nd

Cro

atia

Spa

in

UK

Norw

ay

Russia

Hung

ary

Denm

ark

Euro

pe

Austr

ia

Serb

ia

Italy

Belg

ium

Ne

the

rla

nds

Fin

land

Fra

nce

Germ

any

Bela

rus

Czech R

ep

ub

lic

Online advertising year-on-year growth in 2015 (%)

Source: IAB Europe and IHS

…at all levels of market maturity and market size

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

FinlandFranceGermany

Hungary

Ireland

ItalyNetherlands

Norway

Poland

Russia

Serbia

Slovenia

Spain

Austria

Belarus

SwedenSwitzerlandTurkey

UK

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

- 20 40 60 80 100 120 140 160 180 200

Source: IAB Europe and IHS

Online ad spend per capita (€m)

Western Europe: a snapshot

38.0%

15.7%

45.9%

0.4%

Display Classifieds & Directories Paid-for-search Other

Western Europe: share of formats in 2015

Source: IAB Europe and IHS

2014 (€bn) 2015 (€bn) Like-for-like

growth (%)

Share of Total

(%)

Display 10.5 12.3 17.7% 38.0%

of which video 1.5 2.1 37.3% 16.8%*

of which mobile 2.1 3.4 60.0% 10.9%*

Classifieds &

Directories

4.8 5.1 4.8% 15.7%

Paid-for-search 13.3 14.9 11.9% 45.9%

of which mobile 2.1 3.3 55.4% 12.0%*

Total 28.7 32.5 12.9% 100.0%

CEE: a snapshot

40.8%

5.4%

53.8%

0.0%

Display Classifieds & Directories Paid-for-search Other

CEE: share of formats in 2015

Source: IAB Europe and IHS

2014

(€bn)

2015 (€bn) Like-for-like

growth (%)

Share of

Total (%)

Display 1.3 1.5 14.2% 40.8%

of which video 0.2 0.2 25.4% 16.2%*

of which mobile 0.1 0.2 70.1% 11.0%*

Classifieds &

Directories

0.2 0.2 3.3% 5.4%

Paid-for-search 1.7 2.0 17.2% 53.8%

of which mobile 0.03 0.5 208.6% 27.6%*

Total 3.2 3.7 15.1% 100.0%

• Programmatic and automation

• Proliferation of e- and m-commerce

• Rise of online video consumption

• Growth in premium video inventory – attracting

TV budgets

• Improvement in ad quality

• Shift to a mobile-first advertiser mentality

• Social media advertising

• The emergence of native advertising

• Ad blocking

• Viewability and ad fraud

• Misuse of data

• Plateau of desktop advertising – adapting

desktop ads to mobile

• High production costs

• Structural barriers

• Macroeconomic environment and adverse

political conditions

Drivers and hurdles in 2015 as reported by local IABs

Formats

Display continues to drive online advertising growth

14.9%

3.6%

13.0%11.9%

15.2%

5.8%

10.8%11.6%

17.4%

4.9%

12.6% 13.1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Display Classifieds & Directories Paid-for-search Total

2013 2014 2015

Year-on-year growth (%)

Source: IAB Europe and IHS

Display outpaces other formats to further

increase its share

47.5% 48.2% 43.8%32.2% 31.0% 32.7% 32.4% 33.8% 36.7% 38.3%

18.3% 14.9% 18.9%

19.8% 20.7% 19.6% 18.5% 16.8% 15.6% 14.6%

34.1% 36.6% 36.6%47.3% 48.0% 47.1% 48.8% 49.2% 46.7% 46.7%

0%

20%

40%

60%

80%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Display Classifieds & Directories Paid-for-search Other

Format shares of online (%)

Source: IAB Europe and IHS

Mobile drives online ad market growth in Europe in

2015

4.9%

12.6%

13.1%

17.4%

36.0%

57.4%

60.4%

0% 10% 20% 30% 40% 50% 60% 70%

Classifieds & Directories

Paid-for-search

Total

Display

Video

Mobile Search

Mobile Display

Year-on-year growth in 2015 (%)

Source: IAB Europe and IHS

Half of European display markets grow above

20%, three above 30%

43

.5%

38

.1%

32

.5%

25

.0%

24

.5%

23

.3%

22

.6%

22

.6%

22

.6%

22

.3%

21

.9%

21

.5%

17

.4%

16

.1%

15

.8%

14

.9%

14

.3%

11

.1%

10

.8%

9.7

%

9.6

%

9.6

%

7.7

%

6.2

%

-2.1

%

-19

.6%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Slo

ve

nia

Ire

lan

d

Po

land

Cro

atia

UK

Spain

Bu

lgaria

Tu

rke

y

Norw

ay

Slo

va

kia

Be

lgiu

m

Sw

itze

rla

nd

Eu

rop

e

Ita

ly

Fra

nce

Sw

ed

en

Au

str

ia

Fin

lan

d

Hu

ng

ary

De

nm

ark

Se

rbia

Ge

rma

ny

Czech

Re

pu

blic

Ne

the

rla

nd

s

Ru

ssia

Bela

rus

Display year-on-year growth (%)

Source: IAB Europe and IHS

12 of the 25 IABs

Video is an increasingly important part of display3

2.1

%

28

.3%

25

.1%

20

.0%

19

.8%

18

.1%

18

.0%

18

.0%

16

.8%

16

.7%

16

.0%

15

.9%

15

.3%

15

.1%

14

.7%

14

.4%

12

.8%

10

.1%

8.7

%

8.5

%

8.4

%

8.4

%

8.1

%

5.5

%

0%

5%

10%

15%

20%

25%

30%

35%

Bulg

aria

Russia

Sw

itze

rla

nd

Italy

Sw

ede

n

Ire

land

Belg

ium

UK

Neth

erla

nds

Euro

pe

Fra

nce

Spa

in

Pola

nd

Germ

any

Cro

atia

Austr

ia

Tu

rkey

Fin

land

Denm

ark

Hung

ary

Czech R

ep

ub

lic

Norw

ay

Slo

ven

ia

Bela

rus

Video share of Display in 2015 (%)

Source: IAB Europe and IHS

Mobile accounts for a quarter of all

European display ad spend, approaching

50% in most advanced markets4

3.1

%

37

.5%

36

.8%

33

.0%

29

.5%

27

.5%

26

.1%

25

.4%

20

.9%

20

.6%

19

.6%

10

.9%

9.6

%

8.5

%

8.5

%

8.0

%

7.9

%

7.3

%

5.1

%

4.4

%

2.9

%

2.6

%

0%5%

10%15%20%25%30%35%40%45%50%

UK

Ire

land

No

rwa

y

Italy

Neth

erla

nds

Fin

land

Sw

ede

n

Euro

pe

Fra

nce

Pola

nd

Hung

ary

Germ

any

Russia

Czech R

ep

ub

lic

Denm

ark

Serb

ia

Austr

ia

Spa

in

Cro

atia

Tu

rkey

Bela

rus

Bulg

aria

2012 2013 2014 2015

Mobile share of Display (%)

Source: IAB Europe and IHS

Mobile outperformed desktop display ad

spend in all but two countries in 201538.1

%

32.5

%

25.0

%

24.5

%

23.3

%

22.6

%

22.6

%

22.6

%

16.1

%

15.8

%

14.9

%

14.3

%

11.1

%

10.8

%

9.7

%

9.6

%

9.6

%

7.7

%

6.2

%

-2.1

%

-19.6

%

12.6

%

12.4

%

25.3

%

7.9

%

23.1

%

22.3

%

21.2

%

0.1

%

3.7

% 7.7

%

9.1

% 13.2

%

2.4

%

0.2

% 7.3

%

7.1

%

6.0

%

1.5

%

-11.5

%

4.3

%

-20.7

%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Ire

land

Pola

nd

Cro

atia

UK

Spa

in

Bulg

aria

Tu

rkey

Norw

ay

Italy

Fra

nce

Sw

ede

n

Austr

ia

Fin

land

Hu

ng

ary

Denm

ark

Serb

ia

Germ

any

Czech R

ep

ub

lic

Neth

erla

nds

Russia

Bela

rus

Display Display excluding mobile

Display advertising year-on-year growth in 2015 (%)

Source: IAB Europe and IHS© 2016 IHS

Fewer C&D markets experienced decline in

2015, but the rate of growth has slowed

down in Europe7

7.8

%

66

.0%

60

.5%

32

.3%

16

.1%

15

.0%

13

.0%

12

.0%

11

.6%

9.9

%

9.2

%

5.8

%

5.2

%

4.9

%

3.2

%

2.1

%

1.9

%

0.3

%

0.3

%

-1.2

%

-1.6

%

-3.4

%

-7.8

%

-30

.7%

-40%

-20%

0%

20%

40%

60%

80%

100%

Be

laru

s

Bulg

aria

Slo

ve

nia

Se

rbia

Hu

ng

ary

Cro

atia

Au

str

ia

Po

land

Ge

rma

ny

Sw

itze

rla

nd

Ne

the

rla

nd

s

De

nm

ark

UK

Eu

rop

e

Slo

va

kia

Fra

nce

Tu

rke

y

Ire

lan

d

Fin

lan

d

Ita

ly

Sw

ed

en

No

rwa

y

Be

lgiu

m

Czech

Re

pu

blic

Classifieds & Directories year-on-year growth in 2015 (%)

Source: IAB Europe and IHS

Paid-for-search maintains double-digit

growth3

5.0

%

30

.0%

28

.1%

27

.6%

25.8

%

25

.7%

20

.0%

19

.9%

19

.5%

18

.2%

16

.0%

15

.3%

13

.7%

12

.6%

12

.5%

10.8

%

10

.5%

10

.0%

8.8

%

6.3

%

6.0

%

5.0

%

4.6

%

4.0

%

3.4

%

0%5%

10%15%20%25%30%35%40%

Sw

ed

en

Cro

atia

Ire

lan

d

Sw

itze

rla

nd

Slo

va

kia

Norw

ay

Bu

lgaria

De

nm

ark

Ru

ssia

Tu

rke

y

Hu

ng

ary

UK

Spain

Eu

rop

e

Po

land

Au

str

ia

Ne

the

rla

nd

s

Be

laru

s

Czech R

epublic

Fin

lan

d

Se

rbia

Ge

rma

ny

Ita

ly

Fra

nce

Be

lgiu

m

Paid-for-search year-on-year growth in 2015 (%)

Source: IAB Europe and IHS

Variance across Europe in mobile share of

search highlights national differences in

search behaviour and monetisation5

0.6

%

36

.5%

30

.9%

30

.0%

25

.1%

23

.3%

22

.9%

22

.3%

22

.1%

21

.5%

20

.5%

18

.7%

16

.5%

5.6

%

0%10%20%30%40%50%60%70%80%90%

100%

Ire

lan

d

Au

str

ia

Ru

ssia

UK

Fra

nce

Se

rbia

Eu

rop

e

Sw

ed

en

Ita

ly

Hu

ng

ary

Czech

Re

pu

blic

Ge

rma

ny

Po

land

Spain

Mobile share of paid-for-search ad spend in 2015 (%)

Source: IAB Europe and IHS

Outlook for 2016

• Favourable economic forecasts

• Large-scale sporting events:

• Euro 2016

• Rio Olympics

• Growth of video, facilitating the move of TV

brand budgets online

• New native ad formats

• Tough comparatives

• Plateau of paid-for-search

• Complexity of devices, platforms, behaviours

• No universal digital currency

• Duplication & fragmentation of ad tech

infrastructure

Drivers

Hurdles

7.8%

5.1% 4.9%

2.7%

0.5%

-4.4%-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Online Cinema TV Radio OOH Print

Media ad spend growth in 2016 (%)

Source: IHS © 2016 IHS

The data and charts shown in this

report cannot be used without the

expressed permission of IAB Europe

and IHS

Contact:

Daniel Knapp, daniel.knapp@ihs.com @_dknapp

Eleni Marouli, eleni.marouli@ihs.com @EMarouli_Ad

Alison Fennah, Fennah@iabeurope.eu

Connect with us:

@IABEurope IAB Europe

www.iabeurope.eu