IAB Europe AdEx Benchmark 2014

Daniel Knapp, IHSEleni 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 European countries

• 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

*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

-8

-6

-4

-2

0

2

4

62

00

4-Q

1

20

04

-Q3

20

05

-Q1

20

05

-Q3

20

06

-Q1

20

06

-Q3

20

07

-Q1

20

07

-Q3

20

08

-Q1

20

08

-Q3

20

09

-Q1

20

09

-Q3

20

10

-Q1

20

10

-Q3

20

11

-Q1

20

11

-Q3

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12

-Q1

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12

-Q3

20

13

-Q1

20

13

-Q3

20

14

-Q1

20

14

-Q3

20

15

-Q1

GDP growth in Eurozone (%)

Eurozone France Italy Germany

Double-digit online advertising growth in 2014

27.4

30.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2013 2014

Total online advertising spend (€bn)

11.6% like-for-like

Online advertising spend has doubled in the last five years…

* Source: IAB Europe for 2011-2014; 2006-2011 retropolatedbased on IHS growth rates

6.6

9.2

14.515.8

18.8

21.9

24.4

27.4

30.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2006 2007 2008 2009 2010 2011 2012 2013 2014

Total online advertising spend (€bn)*

…while maintaining double-digit growth for five consecutive years

19.0%

16.5%

11.5% 11.9% 11.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2010 2011 2012 2013 2014

Online advertising year-on-year growth (%)

Online growth rescued overall European advertising market in 2014

0.0%

-9.5%

-1.6%

11.4%13.8%

11.7%

3.0%

-5.0%

1.8%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

WE CEE Total Europe

2014: advertising year-on-year growth (%)

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

58.7

22.2

43.6

59.9

11.3

39.8

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

WE CEE Total Europe

Ad spend per capita in 2014 (€)

TV Print Online Other

Strong growth puts size of online ad market nearly on par with TV

0.7

5.2

7.8

26.8

30.7

33.5

- 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

Cinema

Radio

OOH

Print

Online

TV

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

Markets

Over half of all European online ad spend comes from three markets; contribution by top 10 to total market stable

57.3%

69.4%

77.9%

86.6%

56.9%

69.9%

78.2%

86.4%

58.8%

70.8%

78.8%

86.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Top 3 Top 5 Top 7 Top 10

Share of European online ad revenue by market (%)

2012 2013 2014

Top 10 European online advertising markets at a glance

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Total online ad spend (€m)

2013 2014

All European markets recorded positive growth in online advertising in 2014…

43

.1%

33

.3%

32

.8%

20

.8%

19

.5%

18

.7%

17

.3%

16

.3%

16

.0%

16

.0%

14

.7%

14

.3%

13

.8%

13

.3%

12

.7%

12

.0%

11

.6%

11

.4%

11

.2%

10

.8%

9.5

%

9.3

%

8.4

%

7.8

%

7.7

%

6.6

%

2.3

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Slo

ven

ia

Irel

and

Bel

aru

s

Turk

ey

Hu

nga

ry

Bu

lgar

ia

Ru

ssia

Gre

ece

Au

stri

a

Bel

giu

m

Slo

vaki

a

UK

Swit

zerl

and

Swed

en

Fin

lan

d

Ital

y

Euro

pe

Net

her

lan

ds

Den

mar

k

Cro

atia

Serb

ia

Ger

man

y

No

rway

Po

lan

d

Cze

ch

Fran

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Ro

man

ia

Online ad growth like-for-like in 2014 (%)

…and 20 markets grew double-digit

BelgiumBulgaria

Croatia

Czech Republic

DenmarkFinland

France

Germany

Greece

Hungary

Ireland

Italy Netherlands

NorwayPoland

Romania

RussiaSlovakia Austria

Belarus

SwedenSwitzerland

Turkey

UK

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

- 20 40 60 80 100 120 140

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

9.1%

6.3%

15.5%

11.5%

14.9%

3.6%

13.0%11.9%

15.2%

5.8%

10.8%11.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Display Classifieds &Directories

Paid-for-search Total

Year-on-year growth (%)

2012 2013 2014

Display grew its share, eating into both Paid-for-search and Classifieds & Directories

47.5% 48.2% 43.8%32.2% 31.0% 32.7% 32.4% 33.8% 35.6%

18.3% 14.9% 18.9%

19.8% 20.7% 19.6% 18.5% 16.8% 15.9%

34.1% 36.6% 36.6%47.3% 48.0% 47.1% 48.8% 49.2% 48.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Format shares of online (%)

Display Classifieds & Directories Paid-for-search Other

35

.1%

34

.1%

29

.4%

26

.4%

23

.4%

23

.3%

22

.5%

18

.6%

17

.4%

16

.2%

15

.8%

15

.5%

15

.2%

14

.5%

13

.4%

12

.9%

12

.1%

11

.5%

10

.4%

10

.2%

9.1

%

8.3

%

7.3

%

4.5

%

1.2

%

-3.1

%

-5.0

%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Irel

and

Slo

ven

ia

Turk

ey UK

Swed

en

Au

stri

a

Bel

aru

s

Fin

lan

d

Ital

y

Bel

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Bu

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Hu

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Euro

pe

No

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Den

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Fran

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Net

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Gre

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Ger

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Serb

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Po

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Ro

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Cro

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Ru

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Display advertising growth year-on-year (%)

Display showed uneven growth with a 40 percentage point range across markets

Video is now an integral part of online display advertising

30

.6%

26

.8%

25

.3%

23

.3%

22

.3%

18

.0%

17

.7%

17

.2%

16

.4%

16

.1%

15

.6%

15

.1%

14

.6%

13

.7%

13

.6%

12

.7%

11

.7%

11

.4%

11

.2%

8.7

%

7.0

%

5.8

%

5.4

%

3.9

%

3.0

%

0%

5%

10%

15%

20%

25%

30%

35%

Slo

ven

ia

Swit

zerl

and

Ru

ssia

Bel

giu

m

Bu

lgar

ia UK

Gre

ece

Swed

en

Net

her

lan

ds

Po

lan

d

Fran

ce

Euro

pe

Irel

and

No

rway

Ger

man

y

Cro

atia

Turk

ey

Au

stri

a

Ital

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Fin

lan

d

Cze

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Hu

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Den

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Ro

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Bel

aru

s

Video share of Display (%)

Video growth is at least double-digit in all markets

18

7.5

%

14

3.5

%

11

5.3

%

10

0.0

%

62

.5%

60

.1%

59

.0%

57

.9%

56

.2%

53

.7%

48

.1%

42

.1%

42

.1%

40

.0%

35

.8%

30

.4%

30

.1%

28

.8%

28

.2%

27

.9%

24

.2%

22

.2%

17

.5%

17

.0%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

Gre

ece

Hu

nga

ry

Au

stri

a

Bel

aru

s

Irel

and

Den

mar

k

Swed

en

Swit

zerl

and

Ro

man

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No

rway

Turk

ey UK

Ru

ssia

Slo

ven

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Euro

pe

Net

her

lan

ds

Bu

lgar

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Fran

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Po

lan

d

Ger

man

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Cze

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epu

blic

Fin

lan

d

Ital

y

Bel

giu

m

Video growth year-on-year in 2014 (%)

Mobile consolidates its position as key driver of display advertising

33

.8%

24

.5%

21

.7%

17

.7%

17

.7%

15

.4%

15

.2%

14

.6%

12

.9%

11

.1%

10

.0%

9.0

%

7.8

%

6.5

%

6.4

%

5.4

%

5.4

%

5.1

%

3.4

%

2.1

%

1.6

%

1.3

%

1.0

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

UK

Irel

and

No

rway

Euro

pe

Ital

y

Net

her

lan

ds

Ru

ssia

Fran

ce

Swed

en

Hu

nga

ry

Au

stri

a

Fin

lan

d

Ger

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Den

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Po

lan

d

Serb

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Cro

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Slo

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Turk

ey

Cze

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epu

blic

Bel

aru

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Bu

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Ro

man

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Mobile display as a share of total Display (%)

2012 2013 2014

35

.1%

34

.1%

29

.4%

26

.4%

23

.4%

23

.3%

22

.5%

18

.6%

17

.4%

15

.8%

15

.5%

14

.5%

13

.4%

12

.9%

12

.1%

9.1

%

8.3

%

7.3

%

4.5

%

1.2

%

-3.1

%

-5.0

%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Irel

and

Slo

ven

ia

Turk

ey UK

Swed

en

Au

stri

a

Bel

aru

s

Fin

lan

d

Ital

y

Bu

lgar

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Hu

nga

ry

No

rway

Den

mar

k

Fran

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Net

her

lan

ds

Ger

man

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Serb

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Po

lan

d

Cze

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epu

blic

Ro

man

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Cro

atia

Ru

ssia

Display year-on-year growth (%)

Display

This is more evident…

-20%

-10%

0%

10%

20%

30%

40%

Irel

and

Slo

ven

ia

Turk

ey UK

Swed

en

Au

stri

a

Bel

aru

s

Fin

lan

d

Ital

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Bu

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Hu

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No

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Po

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Ro

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Cro

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Ru

ssia

Display year-on-year growth (%)

Display Display excluding Mobile

…when we remove Mobile from Display

Mobile was responsible for 50% of market growth

European Display with

mobile: +15.2%

European Display without mobile: +7.9%

Classifieds & Directories struggled in 2014 with 11 countries experiencing decline

65

.0%

50

.0%

44

.7%

32

.5%

20

.1%

20

.1%

20

.0%

12

.5%

11

.6%

10

.7%

10

.0%

7.9

%

6.5

%

5.8

%

5.5

%

5.3

%

3.0

%

2.5

%

0.0

%

0.0

%

0.0

%

-1.2

%

-3.6

%

-6.1

%

-7.2

%

-16

.6%

-51

.6%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Cro

atia

Bel

aru

s

Bu

lgar

ia

Hu

nga

ry

Serb

ia

Slo

vaki

a

Slo

ven

ia

Swit

zerl

and

UK

Ger

man

y

Bel

giu

m

Net

her

lan

ds

Turk

ey

Euro

pe

Den

mar

k

Au

stri

a

Fran

ce

Po

lan

d

Fin

lan

d

Gre

ece

Ru

ssia

Cze

ch R

epu

blic

Irel

and

No

rway

Swed

en

Ital

y

Ro

man

ia

Classifieds & Directories year-on-year growth in 2014

Deceleration of Search in mature markets dampens overall growth

42

.7%

29

.2%

26

.9%

25

.8%

23

.1%

19

.5%

19

.0%

18

.6%

16

.7%

15

.8%

15

.8%

15

.0%

14

.0%

13

.9%

12

.2%

12

.2%

11

.9%

10

.8%

10

.5%

10

.1%

9.0

%

9.0

%

8.7

%

4.4

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Irel

and

Bel

giu

m

Ru

ssia

Bu

lgar

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Gre

ece

No

rway

Hu

nga

ry

Swed

en

Swit

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and

Cze

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Slo

vaki

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Cro

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Au

stri

a

Ital

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Turk

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Den

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Net

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Euro

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Po

lan

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Serb

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Ger

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Fin

lan

d

UK

Fran

ce

Paid-for-search year-on-year growth in 2014 (%)

2013 2014

40.1%

26.5%

22.2%19.1% 18.3% 17.4%

15.1% 14.3%12.5%

6.0% 5.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Mobile share of Paid-for-search in 2014

Notable part of paid-for search is now mobile

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Media advertising revenue in Europe

TV Radio Newpapers Magazines OOH Cinema Online

First market signals from IABs confirm outlook that online will command the highest share of all media ad spend in 2015

Thank you

daniel.knapp@ihs.comeleni.marouli@ihs.com