IAB/PwC Internet Advertising Revenue Report€¦ · Source: IAB Internet Advertising Revenue...
Transcript of IAB/PwC Internet Advertising Revenue Report€¦ · Source: IAB Internet Advertising Revenue...
IAB/PwC Internet Advertising Revenue Report2015 Half Year and Q2 2015
Oct. 2015
HY and Q2 2015 IAB/PwC Digital Ad Revenue Report
Agenda
2
Welcome
Half Year and Q2 2015 Digital Ad Revenue Highlights
Sherrill Mane, SVP Research, Analytics & Measurement, IAB
Detailed Analysis of IAB PWC Half Year and Q2 2015 Report
David Silverman, Partner, PriceWaterhouseCoopers
A Look at Digital Spend Drivers
Peter Stabler, Managing Director, Internet/Advertising Equity Research,
Wells Fargo Securities LLC
Q & A
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Important Note on Q&A
p 3
Journalists and IAB members can ask questions at
any time during the presentations. Please type
questions into the Chat box on the WebEx user
interface.
● We will create a queue and answer as
many questions as possible following the
presentations.
● Additional press questions can be
directed to Laura Goldberg:
● Additional questions from IAB members
can be directed to Kristina Sruoginis:
The presentations and report will be available for
download after the webinar at:
http://www.iab.com/adrevenuereport
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
IAB/PwC Digital Ad Revenue Report Highlights
Oct. 2015
2015 Half Year and Q2 2015
4
Sherrill Mane SVP, Research, Analytics and Measurement, IAB
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
2015 First Half Year Digital Ad Revenue Highlights
“It’s not what you look at that matters,
it’s what you see.”
-- Henry David Thoreau
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report5
Half Year 2015 Interactive Advertising Outpaces the Market
6
2015 first half US interactive ad revenues total $27.5 billion, marking the sixth consecutive year of double-digit first half year growth. This represents a 19% (or $4.4 billion) increase from 2014 first half of $23.1billion
Stellar revenue picture for digital ad revenue contrasts with small overall ad market declines reported by both Nielsen (-5%) and Kantar(-4%) over same time last year
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Half Year 2015 Interactive Advertising Outpaces the Market
7
Key drivers of revenue growth Mobile soars, with 54% uptick to $8.2 billion total, now accounting for 30% of total
interactive ad revenue
Digital video continues double digit growth, up 35% since same time last year for a total of $2.0 billion
Across measured platforms and formats, the aggregate social advertising revenue now stands at $4.5 billion, up 51% over first half 2014
Some softness in display and sponsorships (-4%), with display at $3.9 billion and sponsorships now at $366 million
Similar patterns prevail for 2nd quarter 2015 internet ad revenue, up 23% over same time in 2014, to a total of $14.3 billion
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
HY 2015 Year Over Year Revenue Growth
8
$ B
illio
ns
Sources: IAB Internet Advertising Revenue Report, 2015 First Half Year and 2nd Quarter Report; The Nielsen Company, MonitorPlus
(Standard Calendar, Total includes B2B, National Internet (Display only), FSI Coupons), Oct. 2015; Kantar Press Release Oct. 2015
The Nielsen Company
estimates total media
revenues decreased
5% over First Half
2015 to $59.1B;
Kantar Media
estimates a 4% decrease.
$23.1
$27.5
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
HY 2014 HY 2015
Total Media Ad Revenue Growth
(HY 2014 vs. HY 2015)
Digital Ad Revenue Growth (HY 2014 vs. HY 2015)
19%
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
First Half Year Revenue Track: Double-Digit Growth For 5 Years
9
$12,127
$14,941$17,028
$20,066
$23,091
$27,481
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
1HY '10 1HY '11 1HY '12 1HY '13 1HY '14 1HY'15
Source: IAB Internet Advertising Revenue Reports, First Half Year 2010-2015
US Digital Ad Revenue ($ Millions)First Half Year and % YoY Growth
+23%
+14%+18%
+15%
+19%
HY 2015 Ad Revenue Growth Digital vs. Top Non-Digital Media
10
-3%
7%
1%
15%
Total Ad Revenue HY 2014 vs. HY 2015 ($Billions)
$7.6
$2.8
$5.9
$25.7
$13.0
$7.3
$2.9
$4.9
$24.9
$12.7
Magazine
Radio
Newspaper
Network TV
Cable TV
2015
2014
Source: Nielsen HY 2015 Oct. 2015
+Source: PWC IAB First Half Year and Q2 2015 Internet Advertising Revenue Report, Oct. 2015
$23.1 $27.5Internet
Percent
YoY Change
19%
-7%
-3%
-16%
1%
-4%
The total U.S. advertising market includes other segments not charted here.Broadcast Television includes Network and Syndicated and Spot television advertising revenue. Cable Television includes National Cable Networks and Local Cable television advertising revenue.Radio includes Network and Spot Radio advertising revenue. Newspaper includes Local, National, Sunday Supplement. Magazine includes Local, National.
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
+
Mobile Advertising Revenue Track ShowsExplosive Growth
11
$0.6 $1.2
$3.0
$5.3
$8.2
$0.6$1.6
$3.4
$7.1
FY '10 FY'11 FY'12 FY '13 FY '14 HY '15
1st Half Year 2nd Half Year
Source: IAB Internet Advertising Revenue Reports, Full and Half Year 2010-2015
US Mobile Ad Revenue ($ Billions)First Half Year, Full Year and % YoY Growth
11
Growth
FY: 149%
Growth
1HY: 95%
FY: 111%
$1.0$2.1
$12.5
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Growth
1HY:
54%
$4.0
$7.1
Growth
1HY:145%
FY: 110%
Growth
1HY: 75%
FY: 76%
*Full year totals accurately reflect the sum of half year totals as rounded to two decimal places.
Digital Video Advertising on a Growth Trajectory, FH Year Revenue More than Tripled Since 2010
12
FY '10 FY'11 FY'12 FY '13 FY '14 HY'15
1st Half Year 2nd Half Year
Source: IAB Internet Advertising Revenue Reports, Full and Half Year 2010-2015
US Video Ad Revenue ($ Billions)First Half Year, Full Year and % YoY Growth
12
Growth
1HY: 47%
FY:
29%
$2.2
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Growth
1HY:
35%
Growth
1HY:
24%
FY: 19%
Growth
1HY:
18%
FY: 29%
Growth
1HY: 13%
FY: 17%
$3.3B
$2.8B
$2.3B
$1.8B
$1.4B
$0.6B $0.9B $1.0B $1.3B $1.5B $2.0B
$0.8B
$0.9B
$1.3B
$1.5B
$1.8B
Social Media Advertising Revenue Grows Over 50% Every Half Year Measured
13
$2.9
$4.5
$7.0
$4.4
FY'12 FY '13 FY '14 HY '15
1st Half Year 2nd Half Year
Source: IAB Internet Advertising Revenue Reports, Full and Half Year 2010-2015
US Social Media Ad Revenue ($ Billions)First Half Year, Full Year and % YoY Growth
13
Growth
1HY: 50%
FY: 53%
$2.6 $2.2
$2.9
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Growth
1HY:
51%Growth
1HY: 58%
FY: 57%
$4.1
$1.9$1.2
$1.7
Q2 2015 Revenue Compared With Q2 2014
14
$ B
illio
ns According to Nielsen, total media
revenues decreased 4% from
Q2 2014 to Q2 2015 to 29.7B.
Kantar Media estimates a
4% decrease to $38.0B.
$11.7
$14.3
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
Q2 2014 Q2 2015
Total Media Ad Revenue Change
(Q2 '14 vs. Q2 '15)
Digital Ad Revenue Growth (Q2 '14 vs. Q2 '15)
23%
Sources: IAB Internet Advertising Revenue Report, 2015 First Half Year and 2nd Quarter Report; The Nielsen Company, MonitorPlus
(Standard Calendar, Total includes B2B, National Internet (Display only), FSI Coupons), Oct. 2015; Kantar Press Release Oct. 2015
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Q2 2015 Ad Revenue Growth Digital vs. Top Non-Digital Media
15
-3%
7%
1%
15%
Total Ad Revenue Q2 ‘14 vs. Q2 ‘15 ($Billions)
$4.2
$1.5
$3.0
$7.0
$13.0
$4.0
$1.5
$2.5
$6.5
$13.0
Magazine
Radio
Newspaper
Cable TV
Network TV
Q2 '15
Q2 '14
Source: PWC IAB Full Year and Q2 2015 Internet Advertising Revenue Report, Oct. 2015
$11.7 $14.3Internet
Percent
YoY Change
23%
0%
-8%
-17%
1%
-4%
†The total U.S. advertising market includes other segments not charted here.
*Broadcast Television includes Network and Syndicated and Spot television advertising revenue.
**Cable Television includes National Cable Networks and Local Cable television advertising revenue.
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
1Q_13 2Q_13 3Q_13 4Q_13 1Q_14 2Q_14 3Q_14 4Q_14 1Q_15 2Q_15
2013 – Q2 2015
Finance / Insurance / Investment
Automotive
Home and Fashion Family & Lifestyles
News & Information Corporate Information Search Engines / Portals & Communities
Entertainment
SQAD Copyright(c) 2009-2015 SQAD LLC - All Rights Reserved
Display: Eight Category Avg. CPM Trend Weighted Average - August 2015 Release - CPM of All buys Placed Within the Quarter
WebCosts Display Composite Fifty Average CPM, Half Year 2015 - Fifty Same-Site Comparative Report
17SQAD Copyright(c) 2009-2015 SQAD LLC - All Rights Reserved
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
2013 2014 2015
2013 Average CPM: $11.61
2014 Average CPM: $11.35
2015 Average CPM: 6 months: $11.67
30
17
30
5
10
15
20
25
30
35
1
Composite Fifty 2015 SIx Month Comparison With 2014 Year Avg. CPM
Up
Down
Flat
Key Takeaways
18
*Note: Display-related ad formats are defined as: banner ads, digital video commercials, rich media, and sponsorships.
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Brand spend continues to rise:
• CPMs up
• Digital video continues to grown significantly (+35%)
• Revenue associated with impression based advertising up 13% and holding a one third share as it has for some time now
• Hybrid (impression and performance based) advertising up 89% over same time last year
• $4.3 billion of mobile revenue, more than half of its total, is coming from display and video
Dollars moving from other media into digital, all forms of digital
• Revenue growth way ahead of the overall market continues, unabated
• Mobile likely garnering incremental spend from other media, digital media and “experimental” budgets
Positive effects of improved measurement, viewable inventory and combatting fraud becoming noticeable
• Rising CPMs likely offset inventory supply changes due to implementation of viewability, especially for display
IAB/PwC Internet Ad Revenue Report Detailed Findings
Oct. 2015
2015 Half Year and Q2 2015
19
David Silverman
Partner, PriceWaterhouseCoopers
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
PwC
IAB internet advertising revenue report
2015 first six-months results
www.pwc.com
www.iab.net
Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.
PwCPwC
Agenda
21
October 2015
Survey methodology
2015 first six-months results
First six-months and quarterly trends
Advertising formats
Social media
Pricing models
Industry category spending
About PwC
PwCPwC
Survey Methodology
22
October 2015
Survey Scope
The IAB Internet Advertising Revenue Report is part of an ongoing IAB mission to provide an accurate barometer of Internet advertising growth.
To achieve differentiation from existing estimates and accomplish industry-wide acceptance, key aspects of the survey include:
• Obtaining historical data directly from companies generating Internet/online/mobile advertising revenues;
• Making the survey as inclusive as possible, encompassing all forms of internet/online advertising, including websites, consumer online services, ad networks, mobile devices and e-mail providers; and
• Ensuring and maintaining a confidential process, only releasing aggregate data.
Methodology
Throughout the reporting process, PwC:
• Compiles a database of industry participants selling internet/online and mobile advertising revenues.
• Conducts a quantitative mailing survey with leading industry players, including web publishers, ad networks, commercial online service providers, mobile providers, e-mail providers and other online media companies.
• Acquires supplemental data through the use of publicly disclosed information.
• Requests and compiles several specific data items, including monthly gross commissionable advertising revenue by industry category and transaction.
• Identifies non-participating companies and applies a conservative revenue estimate based on available public sources.
• Analyzes the findings, identifies and reports key trends.
PwCPwC
Half year revenues totaled …
23
October 2015
In b
illi
on
s
$23.1
$27.5
HY 2014 HY 2015Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 24
October 2015
Half year revenues totaled $27.5 billion in 2015
Online advertising revenue increased 19.0% in HY 2015.
In b
illi
on
s
$23.1
$27.5
HY 2014 HY 2015
19.0%
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 25
October 2015
2015 second quarter revenues totaled ….
In b
illi
on
s $11.7
$14.3
Q2 2014 Q2 2015
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 26
October 2015
2015 second quarter revenues totaled $14.30 billion
Revenue in Q2 2015 was 22.5% higher than in Q2 2014.
In b
illi
on
s $11.7
$14.3
Q2 2014 Q2 2015
22.5%
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 27
October 2015
Strong Growth between Q1 2015 and Q2 2015
In b
illi
on
s
$13.2
$14.3
Q1 2015 Q2 2015
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 28
October 2015
Strong Growth between Q1 2015 and Q2 2015
Revenue in Q2 2015 was $1.1 billion higher than in Q1 2015.
In b
illi
on
s
$13.2
$14.3
Q1 2015 Q2 2015
8.5%
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC
$0
$2
$4
$6
$8
$10
$12
$14
$16
Q2 2015 revenues were the highest on record at,
$14.3 billion
Source: IAB Internet Advertising Revenue Report, HY 2015
29
October 2015
Since 2010, a strong seasonal trend has emerged for internet advertising revenuesQuarterly growth comparison, 1996–HY 2015
In b
illi
on
s
’97 ’98 ’99 ’09’00
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’10 ’11 ’12 ’13 ’14’96 HY ’15
PwCPwC
Source: IAB Internet Advertising Revenue Report, HY 2015
30
October 2015
First six-months 2015 shows record revenues Historical revenue mix, first half vs. second half
In b
illi
on
s
$3.3 $4.6 $5.8 $7.9 $10.0 $11.5 $10.9 $12.1$14.9 $17.0
$20.1$23.1
$27.5
$4.0$5.0
$6.8
$9.0
$11.2$11.9 $11.8
$13.9
$16.8
$19.5
$22.7
$26.4
?
$0
$10
$20
$30
$40
$50
$60
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Last 6 months
First 6 months
* CAGR: Compound Annual Growth Rate
PwCPwC
$10.1
$1.5
$0.9
$8.2
$2.0
$3.8
$0.4 $0.7
11%14%
2%
54%
35%
-4% -4%-1%
-10%
0%
10%
20%
30%
40%
50%
60%
$-
$2
$4
$6
$8
$10
Search Classifieds &Directories
LeadGeneration
Mobile Digital VideoCommercials
Banners Ads Sponsorship Rich Media
HY 2015 Revenue HY 2015 vs. HY 2014 % Growth
$10.1
Source: IAB Internet Advertising Revenue Report, HY 2015
31
October 2015
Mobile shows the strongest growthAdvertising formats – HY 2015 results and growth rates
In b
illi
on
s
PwCPwC 32
October 2015
Historical trends in internet advertising formatsRevenue share by major ad formats, 2006–HY 2015
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Search Mobile Banner Ads Digital Video Classifieds LeadGeneration
Sponsorship
2006 2007 2008 2009 2010 2011 2012 2013 2014 HY 2015
% o
f to
tal
re
ve
nu
e
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 33
October 2015
Mobile represents a significant percentage of advertising formats
For the half year in 2015, Mobile revenue totaled $8.2 billion
37%
25%8%
44%
52%
4%
30%
Search Display Other
Mobile Search Mobile Display Mobile Other
Source: IAB Internet Advertising Revenue Report, HY 2015
PwC
Historical Mobile format trendsMobile format ad revenue by category, 2003–HY 2015
52% 52% 51%
45% 44%46% 46%47%
50%52%
2% 2% 2%5% 4%
0%
10%
20%
30%
40%
50%
60%
1H 2013 2H 2013 1H 2014 2H 2014 1H 2015
Search Display Other
% o
f to
tal
re
ve
nu
e
Source: IAB Internet Advertising Revenue Report, HY 2015October 2015
34
PwC
Distributing Mobile across formats demonstrates its importance to Search and Display
37%
25%
8%
30%
Search Display Other Mobile
35
October 2015
Formats – HY 2015(Mobile separated)
Source: IAB Internet Advertising Revenue Report, HY 2015
PwC
Distributing Mobile across formats demonstrates its importance to Search and Display
37%
25%
8%
30%
Search Display Other Mobile
36
October 2015
50%
40%
10%
Search Display Other
Formats – HY 2015(Mobile separated)
Formats – HY 2015(Mobile included)
Source: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC
$1.2
$1.7$1.9
$2.6$2.9
$4.1
$4.4
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
1H 2012 2H 2012 1H 2013 2H 2013 1H 2014 2H 2014 1H 2015
CAGR* 53%
Social media demonstrates continued growthSocial media ad revenues, 2012 – HY 2014
37
October 2015
In b
illi
on
s
* CAGR: Compound Annual Growth RateSource: IAB Internet Advertising Revenue Report, HY 2015
PwCPwC 38
October 2015
Pricing modelsInternet ad revenues by pricing model, HY 2014 vs. HY 2015
34%
65%
1%
HY 2014
Impression-based Performance-based
Hybrid
32%
66%
2%
HY 2015
Impression-based Performance-based
Hybrid
Total – $23.1 billion Total – $27.5 billion
Source: IAB Internet Advertising Revenue Report, HY 2015
PwC
Historical pricing model trendsInternet ad revenues by pricing model, 2005–HY 2015
46% 48%
45%
39%37%
33%31% 32% 33% 34%
32%
41%
47%
51%
57%59%
62%65% 66% 65% 65% 66%
13%
5% 4% 4% 4% 5% 4%2% 2% 1% 2%
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 HY2015
CPM Performance Hybrid
% o
f to
tal
re
ve
nu
e
Note: Pricing model definitions may have changed over the time period depicted both within the survey process and as interpreted by respondents
Source: IAB Internet Advertising Revenue Report, HY 2015October 2015
39
PwC
Internet ad revenues by major industry category$23.1 B in HY 2014 vs. $27.5 in HY 2015
21%
13%12%
9% 9%
7% 7%
5% 5%4%
22%
13% 13%
9% 9%
6%7%
5% 5%4%
Retail FinancialServices
Auto Telecom LeisureTravel
PackagedGoods
Tech /Computing
Media Pharma &Healthcare
Entertain-ment
1H 2014 1H 2015%
of
tota
l r
ev
en
ue
†
† Amounts do not total to 100% as minor categories are not displayed.Source: IAB Internet Advertising Revenue Report, HY 2015
October 2015
40
PwCPwCOctober 2015
For information, contact one of the following PwC professionals:New York
David SilvermanPartner, Assurance [email protected]
Russ SapienzaPartner, Advisory [email protected]
Stephanie FaskowManager, Advisory [email protected]
41
Technology and Entertainment, Media, and Communications practicesContacts
IAB/PwC Internet Ad Revenue Report A Look at Digital Spend Drivers
Oct. 2015
2015 Half Year and Q2 2015
42
Peter Stabler
Managing Director, Internet/Advertising Equity Research,
Wells Fargo Securities LLC
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
Questions?
p 43
Journalists and IAB members can ask questions at
any time during the presentations.
Please type questions into the Chat box on the WebEx
user interface.
● Additional press questions can be
directed to Laura Goldberg:
● Additional questions from IAB members
can be directed to Kristina Sruoginis:
The presentations and report will be available for
download after the webinar at:
http://www.iab.com/adrevenuereport
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report
THANK YOU
FOLLOW-UP QUESTIONS:
Additional questions from IAB members can be directed to Kristina Sruoginis:
Additional press questions can be directed to Laura Goldberg:
Reports (from 1996 to present) can be found at: http://www.iab.net/adrevenuereport
IAB 2015 Half Year and Q2 2015 Internet Advertising Revenue Report