IAB Adex Benchmark 2012 Daniel Knapp, IHS Electronics & Media
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©IAB Europe 2013. All rights reserved.
ABOUT THE STUDY
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©IAB Europe 2013. All rights reserved.
A meta-analysis of online ad spend in Europe
RATECARD
Campaigns x Ratecard
GROSS
Revenue Billed
NET
Revenue Billed No Agency commissions
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Horizontal expansion: country coverage
2006: 13 countries
2008:19 countries
2012: 26 countries
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26 countries in 2012
• Austria • Belgium • Bulgaria • Czech Republic • Croatia • Denmark • Finland • France • Germany • Greece • Hungary • Ireland • Italy
• Netherlands • Norway • Poland • Russia • Romania • Serbia • Slovenia • Slovakia • Spain • Sweden • Switzerland • Turkey • UK
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Vertical expansion: format granularity & context
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BIG PICTURE & CONTEXT
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The value of the European online ad market 2012
€24.3bn
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Eurozone volatility casts spell on media economy…
-8%
-6%
-4%
-2%
0%
2%
4%
6%
2004
Q1
2004
Q2
2004
Q3
2004
Q4
2005
Q1
2005
Q2
2005
Q3
2005
Q4
2006
Q1
2006
Q2
2006
Q3
2006
Q4
2007
Q1
2007
Q2
2007
Q3
20
07 Q
4 20
08 Q
1 20
08 Q
2 20
08 Q
3 20
08 Q
4 20
09 Q
1 20
09 Q
2 20
09 Q
3 20
09 Q
4 20
10 Q
1 20
10 Q
2 20
10 Q
3 20
10 Q
4 20
11 Q
1 20
11 Q
2 20
11 Q
3 20
11 Q
4 20
12 Q
1 20
12 Q
2 20
12 Q
3 20
12 Q
4 20
13 Q
1 20
13 Q
2 20
13 Q
3 20
13 Q
4
GDP growth in Europe
Eurozone GDP Growth y-o-y France GDP Growth y-o-y Italy GDP Growth y-o-y Germany GDP Growth y-o-y
Source: IHS
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…industrial production & household consumption are good indictators for advertising market prospects…
-15%
-10%
-5%
0%
5%
10%
15% 19
90
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
UK advertising revenue growth
Actual NAR growth (yoy) Projected NAR growth (yoy)
Source: IHS Electronics & Media
…tectonic shifts are characterizing ad markets…
11
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Indonesia Argentina China Brazil Russia Mexico UK Germany France Spain Italy
CAGR of Total Media Ad Revenue (2011-2017)
Source: IHS Electronics & Media
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…but European online ad growth continues at a double-digit rate
21.8 24.3
0
5
10
15
20
25
30
2011 2012
Total online advertising (€bn)
11.5%
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Indeed, online is more resilient to macro-pressure than other media
2.5%
9.4%
3.8%
-5.2%
2.9%
-4.0%
9.5%
26.6%
11.5%
-1.7%
7.2%
-0.4%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
WE CEE Total
2012: economic & advertising growth
GDP Total excl. Online Online Total
Source: IAB Europe & IHS Electronics & Media
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Overall ad spend shows volatility, TV is resilient, online shows linear growth trajectory
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010 2011 2012
Ad spend per capita by medium
Online ad spend per capita TV ad spend per capita Total ad spend per capita
Source: IAB Europe & IHS Electronics & Media
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There is no single factor for print decline & online does not absorb all print revenue, but budgets do migrate
0
10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012
Ad spend per capita
Online ad spend per capita Print ad spend per capita
Source: IAB Europe & IHS Electronics & Media
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In 6 years online more than doubled its share of all media revenue: 1 in 4 ad €s go to online in 2012
10.3%
19.0%
25.6%
0%
5%
10%
15%
20%
25%
30%
2006 2009 2012
Online market share of ad budgets: total Europe
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Online for the first time overtakes print newspaper ad spend & becomes 2nd biggest media category in Europe
0.6
4.6
6.3
8.7
19.3
24.3
28.1
0 5 10 15 20 25 30
Cinema
Radio
OOH
Magazines
Newspapers
Online
TV
2012: European advertising market share by medium
Note: Source for non-online ad revenue is IHS. Print ad spend excludes direct mail.
Source: IAB Europe & IHS Electronics & Media
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Small number of markets make largest contribution to European ad spend
46.0%
69.5% 78.3%
86.7% 95.5%
0%
20%
40%
60%
80%
100%
Top 2 Top5 Top 7 Top 10 Top 15
Share of European online ad revenue by market
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Russia climbs up to 4th largest spender as remaining top 10 maintain their position in the European ranking
6642
4551
2770
1536 1418 1207 920 841 617 591
0
1000
2000
3000
4000
5000
6000
7000 Total online ad spend (€m)
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What is driving growth?
• Both emerging markets growing from low basis and established markets that demonstrate sustainability of online ad momentum
• Video • Mobile • RTB has the potential to be a driver • Social networking sites • Europeanisation and consolidation of classifieds & directories • Localisation & individualisation of search, mobile search
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CEE leads growth, but remarkable is the sustainability of growth in mature markets
12%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40% Online ad growth
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Bulgaria
Croatia
Czech Republic
Denmark
Finland France Germany
Greece
Hungary
Ireland
Italy Netherlands
Norway
Poland Romania
Russia
Serbia
Spain
Austria
Belgium
Sweden
Switzerland
Turkey
UK
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 20 40 60 80 100 120
Online ad spend per capita (€)
Onl
ine
ad m
arke
t gro
wth
Note: country bubbles represent market size
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Bulgaria
Croatia
Czech Republic
Denmark
Finland France Germany
Greece
Hungary
Ireland
Italy Netherlands
Norway
Poland Romania
Russia
Serbia
Spain
Austria
Belgium
Sweden
Switzerland
Turkey
UK
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0 20 40 60 80 100 120
Online ad spend per capita (€)
Onl
ine
ad m
arke
t gro
wth
Note: country bubbles represent market size
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FORMATS
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Search outperforms, display still high single digit, classifieds & directories pick up pace
17.9%
15.3%
5.7%
14.5% 15.5%
9.1%
6.3%
11.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Search Display Classifieds & directories Grand total
Year-on-year growth by format
2011 2012
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Search remains strongest segment in 2012
47.1% 48.8%
32.7% 32.4%
19.6% 18.5%
0%
20%
40%
60%
80%
100%
2011 2012
Format shares of online
Others Classifieds and directories Display Search
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Display growth shows few strong outliers above average rate, yet more outliers below average rate
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
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Online video is now 13% of all online display…
13%
0%
5%
10%
15%
20%
25%
Italy Spain European average
Poland UK Finland Russia Sweden Turkey
Online video share of display
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…but range of growth varies tremendously…
50.6%
-50%
0%
50%
100%
150%
200%
250% Online video growth
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…and so do absolute video market sizes
0 20 40 60 80
100 120 140 160 180
2012: size of online video advertising by market
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Mobile revenues are becoming significant, but are still lagging behind consumption
5%
0%
2%
4%
6%
8%
10%
12%
14% Mobile display share of total online display 2011 2012
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Just how crucial video and mobile are becomes clear if factoring them out of display
-30%
-20%
-10%
0%
10%
20%
30%
40% display display excl. video display excl. video and mobile
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Classifieds & Directories sees group of countries with strong positive outliers above average rate
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35% Classifieds & directories growth
Note: Russia not measured for classifieds & directories
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Majority of markets outperform average search growth, largest search market just shy of average
-20%
-10%
0%
10%
20%
30%
40%
50%
60% Search growth
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OUTLOOK
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What may the future hold? Addressable market is not only growing in mobile, but fixed-line as well…
20
30
40
50
60
70
80
90
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fixed Broadband penetration of households (%)
France Germany Italy Spain UK Nordics total Western Europe
Source: IHS Electronics & Media
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…yet the emerging multi-device landscape creates new opportunities
0 50 100 150 200 250 300 350 400 450 500
PC
Connected TV sets
Games consoles
Blu-ray disc players
STBs
Tablets and eReaders
Smartphones Western Europe: Connected Devices (m)
2016
2012
Source: IHS Elecronics & Media
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