IAB Europe Adex Benchmark 2013

@IABEU_Interact #Interact2014

IAB Europe Adex Benchmark 2013

Daniel Knapp Director Adver=sing Research 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 26 European countries

•  Austria •  Belgium •  Bulgaria •  Czech Republic •  Croa=a •  Denmark •  Finland •  France •  Germany •  Greece •  Hungary •  Ireland •  Italy

•  Netherlands •  Norway •  Poland •  Russia •  Romania •  Serbia •  Slovakia •  Slovenia •  Spain •  Sweden •  Switzerland •  Turkey •  UK


Added format granularity & context


BIG PICTURE & CONTEXT


The value of online adver=sing in 2013

€27.3bn


Eurozone economy is coming out of a double-‐dip recession

-‐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

2007 Q4

2008 Q1

2008 Q2

2008 Q3

2008 Q4

2009 Q1

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

GDP Growth in Europe (%)

Eurozone GDP Growth France GDP Growth Italy GDP Growth Germany GDP Growth


Double-‐digit growth in online adver=sing in 2013

€ 24.4 € 27.3

0

5

10

15

20

25

30

35

2012 2013

Total online adver8sing (€bn)

11.9% like-‐for-‐like


A historical perspec=ve

€ 6.6 € 9.2

€ 14.5 € 15.8

€ 18.8 € 21.9

€ 24.4 € 27.3

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013

Total online adver8sing spend (€bn)*

* Source: IAB Europe for 2011-‐2013; 2006-‐2011 retropolated based on IHS growth rates


In a vola=le market environment, online li`ed overall ad spend

-‐7.8%

-‐2.5%

-‐6.7%

10.8%

21.2%

11.5%

-‐2.5%

1.8%

-‐1.7%

-‐10%

-‐5%

0%

5%

10%

15%

20%

25%

WE CEE Total Europe

2013: adver8sing year-‐on-‐year growth

Total excl. online Online Total


Despite economic turmoil, online grew its ad spend per capita steadily since 2006

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013

Ad spend per capita (€)

TV Online Print Other media


Due to weak 2013 for all other media, online strengthened its posi=on as it approaches TV

0.7

5.2

7.6

9.1

20.0

27.3

32.3

0 5 10 15 20 25 30 35

Cinema

Radio

OOH

Magazines

Newspapers

Online

TV

Ad spend by category in Europe in 2013 (€bn)


However, no one online category has yet surpassed Newspapers ad spend

0.7

5.2

7.6

9.1

20.0

9.2

32.3

0 5 10 15 20 25 30 35

Cinema

Radio

OOH

Magazines

Newspapers

Online

TV

Ad spend by category in Europe in 2013 (€bn)

Display

Classifieds & Directories

Search


Over half of all European ad spend comes from three markets

57.3%

69.4% 77.9%

86.6%

56.9%

69.9% 78.2%

86.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Top 3 Top 5 Top 7 Top 10

Share of European online revenue by market

2012 2013


A`er a tough year, Sweden increases in rank, helped by economic crisis in Spain

7,381

4,676

3,494

1,843 1,703 1,312

955 901 709 628

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

UK Germany France Russia Italy Netherlands Sweden Spain Norway Denmark

Total online ad spend (€m)

2012 2013


Growth drivers

Social media

Video

Rich media

Mobile internet penetra8on increasing across all of Europe

Programma8c and RTB come into the mainstream

E-‐commerce driving C&D growth


Growth hurdles

AQrac8ng brand spend online

Measurement

Mobile

Video inventory – s8ll very limited

TV dominance in some European markets

Data literacy

Regula8on


Mix of CEE and WE markets above European average; Russia and Turkey only 2 markets above 20%

11.9%

-‐5%

0%

5%

10%

15%

20%

25%

30%

Online ad growth like-‐for-‐like (yoy)


Bulgaria Croa=a

Czech Republic

Denmark Finland

France

Germany Greece

Hungary

Ireland

Italy

Netherlands

Norway

Poland Romania

Russia

Serbia

Slovenia

Spain

Austria

Belgium Sweden

Switzerland

Turkey

UK

-‐10%

-‐5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-‐ 20 40 60 80 100 120

Slovakia

Online ad

market g

rowth

Online ad spend per capita (€)

Bubble size: market value in €m


Uniform growth paferns in 2013

-‐20%

-‐10%

0%

10%

20%

30%

40%

50%

0 5 10 15 20 25 30

Online adver8sing growth year-‐on-‐year (%)

2012 2013


The range of growth is converging across Europe

-‐10%

-‐5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2012 2013

Online adver8sing growth year-‐on-‐year (%)


FORMATS


Accelera=on in Display growth, Display and Search drove online ad spend in 2013

9.1%

6.3%

15.5%

11.5%

14.9%

3.6%

13.0% 11.9%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Display Classifieds & Directories Paid-‐for-‐search Total

Year-‐on-‐year growth (%)

2012 2013


Search and Display grow their share at the expense of Classifieds & Directories

18.3% 14.9% 18.9%

19.8% 20.7% 19.6% 18.5% 16.8%

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

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2006 2007 2008 2009 2010 2011 2012 2013

Format shares of total online

Display Classifieds & Directories Paid-‐for-‐search Other


A renaissance of Display adver=sing: mature markets saw strongest growth in 2013

14.9%

-‐10%

-‐5%

0%

5%

10%

15%

20%

25%

30%

35%

Display adver8sing growth year-‐on-‐year (%)


Online video is now a significant part of Display adver=sing

13.1%

0%

5%

10%

15%

20%

25%

30%

35%

Video share of Display


Growth in video strong, but no country achieves triple-‐digit growth

45.4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Online video growth year-‐on-‐year (%)


Video ad spend mirrors total online ad spend ranking

0

50

100

150

200

250

300

350

400

Online video ad spend (€m)


Mobile now has a double-‐digit share of online display

11.5%

0%

5%

10%

15%

20%

25%

30%

Mobile display as a share of total Display

2012 2013


This is more evident…

-‐10% -‐5% 0% 5%

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

Display year-‐on-‐year growth (%)

Display including mobile


…when we remove Mobile from Display

-‐10% -‐5% 0% 5%

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

Display year-‐on-‐year growth (%)

Display including mobile Display without mobile


Mobile is most important growth engine for online display

European Display with

mobile: +14.9%

European Display without mobile: +1.1%


Classifieds & Directories struggled in 2013 with 11 countries experiencing decline

3.6%

-‐30%

-‐20%

-‐10%

0%

10%

20%

30%

40% Classifieds & Directories year-‐on-‐year growth (%)


Con=nued growth in Paid-‐for-‐search shows the success of the format

13.0%

-‐5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Paid-‐for-‐search year-‐on-‐year growth (%)


Like in Display, Mobile is now a significant driver of Paid-‐for-‐search

12.6%

0%

5%

10%

15%

20%

25%

30%

Ireland Austria UK Europe Sweden Germany France Hungary Spain

Mobile search as a share of Paid-‐for-‐search (%)


OUTLOOK


By 2020, we expect there to be 2bn connected devices across Europe

-‐

500

1,000

1,500

2,000

2,500 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Europe: Installed connected devices (m)

Source: IHS


With growth driven by smartphones, tablets and smart TVs

-‐

500

1,000

1,500

2,000

2,500 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Europe: Installed connected devices (m)

Digital media adapters Pay TV set-‐top boxes FTA set-‐top boxes BD players Smart TVs PCs Game consoles Tablets Smartphones

Source: IHS


What this means is that there will be a huge increase in very small screens, sub-‐15”

0 200 400 600 800 1000 1200

0"-‐4" 10"-‐14" 20"-‐24" 30"-‐34" 40"-‐44" 50"-‐54" 60"-‐64" 70"-‐74" 80"-‐84" 90"-‐94"

110"-‐114"

2019 2012

Average Screen Size by 5" category Sc

reen

siz

e (d

iago

nal i

nche

s)

Shipments (m)

Source: IHS


Thank you! Ques=ons?

Daniel Knapp @_dknapp [email protected]

Business

IAB Europe Adex Benchmark 2013