Adobe global digital advertising report 2014 q3

20% YoY

Global Digital Advertising Report Adobe Digital Index Q3 2014

Table of contents

2 ADOBE DIGITAL INDEX | Global Digital Advertising Report Q3 2014

Search 3 Key insights 4 Overall search spend by currency

5 Search engine spend by currency

6 Search engine average share of spend

7 Search spend growth by industry

8 CTR growth by country and search engine 9 CTR growth by industry

10 CPC growth by country and search engine

11 CPC growth by industry

12 Google Shopping ad share of spend and spend growth

Social 13 Facebook posts by impression type

14 Growth of Facebook posts

15 Share of browser-referred visits

16 Revenue per visit (RPV) from browser-referred traffic

Appendix 17 Predictions

18 Methodology

19 Tables

Digital advertising continues to expand each year. Understanding the trends within search and social helps advertisers make educated decisions.

Key insights Google’s search ad business performed well. Ad costs remained stable. • Global search spend up 22% year over year (YOY). Google’s share of search spend down 1% YOY from 71% to 70%.• Google click-through rates (CTR) grew 14% YOY. Google cost per click (CPC) up 4% YOY.

Google Shopping ads outperformed search engine marketing (SEM) spend. • Google shopping ad spend growth up 35% YOY.

Facebook is becoming a pay-to-play for brands. • Changes to Facebook’s algorithm: 50% decrease in organic post impressions; 5% increase in paid impressions.• Media companies had largest growth in Facebook postings, up 100% YOY. Retail had largest increase in post

interactions, up 13% YOY.

Google remains the dominant source of web traffic referrals. • More than 25% of all browser visits to websites referred from Google.

• Bing is driving higher revenue per visit (RPV) traffic than Google and Facebook.


SEARCH

Overall search spend by currency "e amount of money allocated to search advertisement campaigns is steadily increasing, up 22% globally YOY.

!e "ndings: •  Search advertisement spending in U.S. dollars grew 4% YOY

underperforming global spending growth by 17%.

•  Europe realized a signi#cant boost in overall SEM spending, up 32% YOY. Great Britain was up 8% over the same time period.

SEM ad spending varies across different markets. To properly allocate resources, marketing directors need to keep up with changes in SEM ad spend; otherwise, they run the risk of missing budget targets.

ADOBE DIGITAL INDEX | Global Digital Advertising Report Q3 2014 4

OVERALL INDEXED AVERAGE SEM SPEND GROWTH BY CURRENCY

INDEX 100%

Q3 2013 Q3 2014

Europe realized a 32% YoY

boost in overall SEM spending.

122%

GLOBAL

104% 108%

132%

US UR UKD E

INDEXED AVERAGE GOOGLE SEMSPEND GROWTH BY CURRENCY

Q3 2013 Q3 2014

Q3 2014

INDEXED AVERAGE YAHOO! BING SEM SPEND GROWTH BY CURRENCY

Q3 2013INDEX 100%

INDEX 100%

Yahoo! Bing realized a

46% YoY boost in Europe.

32% YoY

US UR UK

103%

132%

100%

UKEURUSD

139%146%

128%

Worldwide SEM ad spend on Google

rose 13% YoY, while Yahoo! Bing grew

39% YoY.

EURD

SEARCH

Search engine spend by currency Overall worldwide SEM ad spend on Google rose 13% YOY, while overall spend on Yahoo! Bing grew 39% during the same time period.

!e "ndings: •  Yahoo! Bing realized a strong YOY uptick in search ad

spending, up 46% in Europe and 39% globally.

•  Global SEM ad spending on Google was up 13%, while U.S. dollar Google ad spending was near %at YOY, up 3%.

SEM ad spend is moving to different platforms. Marketers need to make sure they are diversi#ed across search engines.


GLOBAL SHARE OF SEARCH SPEND BY QUARTERGOOGLE YAHOO! BING

GOOGLE YAHOO! BING

Q3 2013 Q1 2014Q4 Q2 Q3

USD

UK

EUR

Q3 AVERAGE SHARE OF SPEND BY SEARCH ENGINE

Google controls90% market share

in Great Britainin the most

recent quarter.

Google’s share of search spend

down is 1% from 71% in Q3 2013 to 70% in Q3 2014.

SEARCH

Search engine average share of spend Google remains dominant in commanding a majority of SEM spend with 70% share in the most recent quarter. Although Yahoo! Bing is slowly starting to chip away at that dominance.

!e "ndings: •  Google remains dominant in Europe and Great Britain,

controlling 89% and 90% market share, respectively, in the most recent quarter.

•  Yahoo! Bing grew global share of SEM ad spending by 3% over the past year.

In Europe, the Yahoo! Bing joint venture has not gained as much share as it has in the United States. Knowing where the competition is heating up allows marketers to seek “blue ocean” opportunities in these less competitive markets.


SEARCH

Search spend growth by industry In the past year, search ad spending grew in the auto and retail industry, while the #nancial industry realized a slight decline.

!e "ndings: •  Search ad spending in the auto industry grew 30% YOY.

•  During that same period, search ad spending in the #nancial industry declined by 9%.

A record number of auto sales in 2014 is infusing the automotive industry with money to spend on advertising.


INDEX 100%

Q3 2013 Q1 2014Q4 Q2 Q3

INDEXED AVERAGE OVERALL SPEND GROWTH BY INDUSTRYAUTO FINANCE RETAIL

Auto up30% YoY

Q3 2013 Q1 2014Q4 Q2 Q3

INDEXED AVERAGE OVERALL CTR GROWTH BY COUNTRY

UNITED STATES GREAT BRITAIN JAPAN

INDEX 100%

INDEX 100%

INDEXED AVERAGE CTR GROWTH BY SEARCH ENGINEGOOGLE YAHOO! BING

Q3 2013 Q1 2014Q4 Q2 Q3

Google CTR are up 14%

over the past two quarters.

20% YoY

SEARCH

CTR growth by country and search engine CTRs are increasing globally, up 18% YOY.

!e "ndings: •  Great Britain saw the highest increase in CTR, up 20% YOY.

•  Google CTRs are making a move in 2014, up 14% over the past two quarters. Meanwhile, Yahoo! Bing CTRs spiked in Q4 2013, but have remained relatively %at since then.

Marketing campaigns are becoming more effective as SEM ads become more targeted. Seeking platforms or regions with higher CTRs can help captivate larger audiences.


SEARCH

CTR growth by industry CTRs are up across several industries YOY, increasing as much as 39% in the #nancial industry.

!e "ndings: •  "e auto and #nance industries saw the highest increase in CTR

YOY, up 29% and 39%, respectively.

•  "e heavily competitive retail industry saw a 12% increase in CTR YOY.

As we move into the holiday season, we expect the travel and retail SEM space to become very competitive. Marketers in these industries need to seize every opportunity to get their message across or risk losing important revenue to competitors.


INDEX 100%

INDEXED AVERAGE OVERALL CTR GROWTH BY INDUSTRY

Q3 2013 Q1 2014Q4 Q2 Q3

AUTO FINANCE RETAIL TRAVEL

Finance up39% YoY

Auto up29% YoY

Q3 2013 Q1 2014Q4 Q2 Q3

INDEXED AVERAGE OVERALL CPC GROWTH BY COUNTRY

UNITED STATES GREAT BRITAIN JAPAN

INDEX 100%

INDEX 100%

INDEXED AVERAGE CPC GROWTH BY SEARCH ENGINEGOOGLE YAHOO! BING

Q3 2013 Q1 2014Q4 Q2 Q3

CPC on Google is up 5% YoY, and on Yahoo! Bing

it's up 12%.

14% YoY

SEARCH

CPC growth by country and search engine CPC rates are slowly increasing, up 4% YOY globally.

!e "ndings: • CPC is up 14% YOY in Japan, while CTR is up only 12% during

the same time period.• CPC on Google is up 5% YOY, while CPC on Yahoo! Bing is up

12% during the same time period.

Although CPCs are expected to rise in Q4 2014, marketers can use tools like bidding algorithms to keep costs low and still drive engagement.


SEARCH

CPC growth by industry Coming into the holiday season, we are seeing CPC ramping up in the retail and travel industries.

!e "ndings: •  CPC in the retail industry is up 7% YOY.

•  CPC is down 3% YOY in the auto industry.

CPC growth is lagging CTR grow in all industries, indicating that marketers are ge&ing a bigger bang for their buck with their SEM campaigns.


INDEX 100%

INDEXED AVERAGE OVERALL CPC GROWTH BY INDUSTRY

Q32013

Q3 2014

Q1 2014

Q32013

Q3 2014

Q1 2014

Q32013

Q3 2014

Q1 2014

Q32013

Q3 2014

Q1 2014

Finance

Auto down3% YoY

Retail up7% YoY

Travel

SEARCH

Google Shopping ad share of spend and spend growth Spend on Google Shopping ads, formally known as Google Product Listing Ads, is outperforming other SEM ad spend, up 35% YOY.

!e "ndings: •  Holidays in the winter and spring months are seeing a bump in

shopping ad spend.

Marketers need to diversify the types of ads they are using and incorporate ads that are more visual.


NOV2013

JAN2014

MAR2014

MAY2014

JUL2014

SEPT2013

SEPT2014

INDEXED AVERAGE GOOGLE SHOPPING AD SPEND GROWTH

INDEX 100%

Google Shopping ad spend is outperforming

other SEM ad spend. Up 35% YoY.

SOCIAL

Facebook posts by impression type Changes from Facebook to limit posts have led marketers to increase paid impression spend.

!e "ndings: •  Facebook paid impressions are up 5% YOY.

•  Facebook organic impressions are down 50% YOY.

Marketers should keep an eye on how much organic post impressions have been affected over the past year and look to boost visibility with paid impressions.


NOV2013

JAN2014

MAR2014

MAY2014

JUL2014

SEPT2013

SEPT2014

FACEBOOK AVERAGE POST IMPRESSION GROWTH BY TYPE

100%

AVERAGE PAID IMPRESSIONS AVERAGE ORGANIC IMPRESSIONS

5% YoY

50% YoY

SOCIAL

Growth of Facebook posts Posts on Facebook have increased across several industries, and post interactions are up for both #nancial and retail companies.

!e "ndings: •  "e media and entertainment industry had the biggest increase

in the number of Facebook posts, up 100% YOY.

•  "e retail industry had the largest increase in post interactions (comments, likes, shares, and other interactions), up 13% YOY.

A decrease in organic impressions has led to an increase in posts as marketers look to #nd a balance between paid and organic posts to reach their fans.


NOV2013

JAN2014

MAR2014

MAY2014

JUL2014

SEPT2013

SEPT2014

FACEBOOK POST GROWTH BY INDUSTRY

100%

RETAIL MEDIA FINANCIAL TRAVEL

Media up100% YoY

RETAIL MEDI INANCIAL TECH TRAVEL

FACEBOOK POST INTERACTION RATE BY INDUSTRY

2%

4%

Retail up13% YoY

A F

FACE

BOO

K

TWIT

TER

TUM

BLR

YOUT

UBE

STUM

BLEU

PON

BLO

GGER

PIN

TERE

ST

RED

DIT

LIN

KED

IN

PERCENT OF BROWSER SOCIAL-REFERRED VISITS TO RETAIL

GOOGLE YAHOO! BIN ACEBOO WITTER OTHER SOCIAL

10%

20%

PERCENT OF TOTAL BROWSER-REFERRED VISITS BY INDUSTRY(Q3 2014)

MEDIA AND ENTERTAINMENT RETAIL OVERALL U.S. TRAFFIC

52% YoY

Facebook refers3x more visitsto media sites

than Yahoo! Bing.

TKFG

SOCIAL

Share of browser-referred visits Search leads in terms of traffic, but some social networks are creating surprising traffic in certain industries.

!e "ndings: •  Retail referred visits from Facebook are down 3% YOY.

•  Retail referred visits from Twi&er are up 52% YOY.

•  In the United States, Google referred over 25% of all browser visits to websites in Q3.

•  Facebook refers three times more visits to media sites than Yahoo! Bing.

Understanding where traffic growth currently exists and where it is growing can help with creating the right marketing mix.


SOCIAL

Revenue per visit (RPV) from browser-referred traffic Search still produces a higher percentage of traffic and RPV from browser-referred traffic, but some social networks are close behind.

!e "ndings: •  Yahoo! Bing produces the highest referred RPV to retail sites from

search and social browser-referred traffic.

•  Browser-referred RPV to retail from Facebook, Tumblr, Twi&er, and Pinterest all grew faster YOY than both Yahoo! Bing and Google.

With retail browser-referred visits, each network provides its own value to ge&ing traffic to your site. Optimizing the traffic of each ensures the best results in busy Q4.


FACEBOOK PINTERES WITTER TUMBLR GOOGLE YAHOO! BING

RPV TO RETAIL FROM BROWSER REFERRERS

Highest referred

RPV

$1

$2

TT

•  SEM spend will grow 20%-25% over the next year.

•  Trends show that macroeconomic data, like weather, and unemployment, will be the next major factor for maximizing conversion rates.

•  Mobile traffic continues to increase, and 40% of all paid search traffic will come from smartphones in a year.

•  Google Shopping ads will grow from 15% to 25% in a year.

•  Facebook paid impressions for retail will increase 10%-20% during Q4.


ADOBE DIGITAL INDEX Predictions

ADOBE DIGITAL INDEX Methodology "is report is based on consumer data to brand sites during 2013 and 2014. It consists of aggregated and anonymous data from visits to websites in multiple industries and segments, captured from Adobe Social, Adobe Analytics, and Adobe Media Optimizer.

Sample information includes:

•  400+ billion non-app, browser referred visits

•  300+ billion Facebook post impressions

•  1.05+ billion search ad impressions

Visit our website: adobe.ly/digitalindex

Read our blog: adobe.ly/digitalindex

Follow us: @adobeindex

Ask a question or make a suggestion: [email protected]

ADOBE DIGITAL INDEX | U.S. Digital Video Benchmark Q1 2014 18

ADOBE DIGITAL INDEX Tables

ADOBE DIGITAL INDEX | U.S. Digital Video Benchmark Q1 2014

Indexed Average Google Shopping Ad Spend Growth (Total PLA Spend) 9/1/2013 10/1/2013 11/1/2013 !2/1/2013 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014

100% 116% 135% 134% 115% 116% 121% 122% 135% 131% 122% 132% 135%

Overall Indexed Average Spend Growth by Currency Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

GLOBAL 100% 114% 111% 116% 122% USD 100% 103% 96% 99% 104% EUR 100% 115% 114% 127% 131% GBP 100% 115% 97% 118% 108%

19

Indexed Average Google Spend Growth by Currency Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

USD 100% 104% 98% 97% 103% EUR 100% 117% 116% 125% 132% GBP 100% 119% 90% 106% 100%

Indexed Average Yahoo! Bing Spend Growth by Currency Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

USD 100% 105% 124% 133% 128% EUR 100% 103% 110% 144% 146% GBP 100% 109% 120% 142% 139%

Average Share of Search Engine Spend by Quarter Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Google 71% 70% 72% 71% 70% Yahoo! Bing 29% 30% 28% 29% 30%

Q3 Average Share of Spend by Search Engine USD EUR GBP

Google 68.1% 88.7% 89.8% Yahoo! Bing 31.9% 11.3% 10.2%

Indexed Quarterly Cost Growth by Industry Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Auto 100% 92% 131% 136% 130% Finance 100% 80% 97% 89% 91% Retail 100% 115% 111% 113% 117%

Indexed Average CTR Growth by Country Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

United States 100% 99% 107% 117% 118% Great Britain 100% 97% 103% 111% 120% Japan 100% 107% 107% 111% 112%

Indexed Average CTR Growth by Search Engine Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014


Indexed Average CTR Growth by Industry Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Auto 100% 111% 112% 140% 129% Finance 100% 112% 124% 140% 139% Retail 100% 107% 99% 103% 105% Travel 100% 101% 90% 117% 126%

Indexed Average CPC Growth by Country Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

United States 100% 106% 101% 103% 101% Great Britain 100% 99% 107% 105% 104% Japan 100% 102% 106% 108% 114%

Indexed Average CPC Growth by Search Engine Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014


Indexed Average CTR Growth by Industry Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Auto 100% 104% 104% 101% 97% Entertainment 100% 131% 129% 113% 97% Finance 100% 102% 100% 100% 98% Retail 100% 104% 98% 107% 107.0% Travel 100% 102% 106% 108% 106.0%

Facebook Post Engagement Rate by Industry Q3 2013 Q3 2014

Retail 3.70% 4.18% 113% Media 2.87% 2.42% 84% Finance 2.36% 2.37% 100% Tech 3.13% 2.89% 92% Travel 3.51% 3.49% 99%

ADOBE DIGITAL INDEX Tables

ADOBE DIGITAL INDEX | U.S. Digital Video Benchmark Q1 2014

Facebook average post impression growth by type 9/1/2013 10/1/2013 11/1/2013 12/1/2013 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014

Average Paid Impressions 100% 146% 145% 141% 115% 121% 138% 135% 136% 96% 90% 108% 105% Average Organic Impressions 100% 88% 86% 68% 71% 70% 69% 67% 70% 53% 57% 58% 50%

©2014 Adobe Systems Incorporated. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

20

Facebook average post impression growth by type 9/1/2013 10/1/2013 11/1/2013 12/1/2013 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014

Average Paid Impressions 88% 128% 107% 124% 101% 106% 121% 136% 120% 84% 79% 95% 92% Average Organic Impressions 143% 126% 123% 97% 102% 100% 99% 96% 100% 76% 82% 83% 78%

Facebook average post growth by industry 9/1/2013 10/1/2013 11/1/2013 12/1/2013 1/1/2014 2/1/2014 3/1/2014 4/1/2014 5/1/2014 6/1/2014 7/1/2014 8/1/2014 9/1/2014

Average Posts 100% 106% 101% 99% 115% 110% 106% 107% 120% 132% 143% 155% 163% Average of Average Posts 0.8874 0.9407 0.8984 0.8830 0.8113 0.8646 0.9390 0.9485 1.0643 1.1752 1.2663 1.3799 1.45


Retail 100% 113% 96% 94% 87% 84% 103% 94% 120% 141% 145% 159% 143% Media 100% 109% 112% 112% 107% 131% 140% 153% 163% 174% 175% 189% 200% Finance 100% 93% 101% 109% 86% 89% 105% 104% 119% 116% 119% 135% 143% Travel 100% 126% 105% 111% 106% 104% 110% 109% 114% 115% 134% 125% 137%


Retail 0.9192 1.0367 0.8832 0.8603 0.8042 0.7725 0.9438 0.8656 1.1049 1.2926 1.3321 1.4592 1.3114 Media 0.6983 0.7637 0.7844 0.7856 0.7485 0.9181 0.9789 1.0653 1.1369 1.2160 1.2213 1.6872 1.69 Tech 0.9313 0.8662 0.9399 1.0139 0.7997 0.8261 0.9768 0.9700 1.1069 1.0822 1.1068 1.2576 1.33 Finance 0.9211 1.0708 0.9324 0.9088 0.7207 0.9618 0.8905 0.9571 1.0253 1.0146 1.5659 1.5744 1.59 Travel 0.8735 1.0972 0.9186 0.9738 0.9221 0.9112 0.9575 0.9519 0.9943 1.0028 1.1712 1.0901 1.2