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IAB Internet Advertising Revenue Report 2013 full year results www.pwc.com www.iab.net
IAB Internet Advertising Revenue Report 2013 full year results
www.pwc.com www.iab.net
PwC April 2014
Agenda
Survey methodology 2013 full year results Full year and quarterly trends Advertising formats Pricing models Industry category spending Advertising market share by media About PwC
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PwC April 2014
Survey Methodology
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 Web sites, 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.
• Supplemental Data is acquired 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.
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PwC April 2014
Annual revenues totaled $42.8 billion in 2013
Online advertising revenue increased 17.0% in 2013.
4
In b
illi
ons
$36.57
$42.78
2012 2013 Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Annual revenues totaled $42.8 billion in 2013
Online advertising revenue increased 17.0% in 2013.
5
In b
illi
ons
$36.57
$42.78
2012 2013
17.0%
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Fourth quarter revenues totaled $12.11 billion in 2013
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In b
illi
ons $10.31
$12.11
Q4 2012 Q4 2013 Source: IAB/PwC Internet Advertising Revenue Report, 2013
Revenue in Q4 2013 was $1.8 billion higher than in Q4 2012.
PwC April 2014
Fourth quarter revenues totaled $12.11 billion in 2013
Revenue in Q4 2013 was $1.8 billion higher than in Q4 2012.
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In b
illi
ons $10.31
$12.11
Q4 2012 Q4 2013
17.5%
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Strong Growth between Q3 2013 and Q4 2013
Revenue in Q4 2013 was $1.5 billion higher than in Q3 2013.
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In b
illi
ons
$10.61
$12.11
Q3 2013 Q4 2013 Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Strong Growth between Q3 2013 and Q4 2013
Revenue in Q4 2013 was $1.5 billion higher than in Q3 2013.
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In b
illi
ons
$10.61
$12.11
Q3 2013 Q4 2013
14.1%
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
$0
$2
$4
$6
$8
$10
$12
$14
A historical perspective of internet advertising Quarterly growth comparison, 1996–2013
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In b
illi
ons
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$12
Source: IAB/PwC Internet Advertising Revenue Report, 2013
Q4 2013 revenues crossed $12 billion
for the first time
PwC April 2014
9.6 12.5
16.9 21.2 23.4 22.7
25.4 30.1
33.2 35.7
9.6 12.5
16.9
21.2 23.4 22.7
26.0
31.7
36.6
42.8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Non-Mobile
Source: IAB/PwC Internet Advertising Revenue Report, 2013
2013 shows record revenues Annual revenue 2004–2013
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PwC April 2014
2013 shows record revenues Annual revenue 2004–2013
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123% Mobile CAGR
9.6 12.5
16.9 21.2 23.4 22.7
25.4 30.1
33.2 35.7
0.6
1.6
3.4
7.1
9.6 12.5
16.9
21.2 23.4 22.7
26.0
31.7
36.6
42.8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mobile Non-Mobile
Source: IAB/PwC Internet Advertising Revenue Report, 2013
12% Non-mobile CAGR
PwC April 2014
Mobile shows the strongest YoY growth Advertising formats - 2013 results and growth rates
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$18.4
$2.6 $1.7
$7.1
$2.8
$7.9
$0.8 $1.3
8.6% 6.9% 3.6%
110.2%
19.5%
2.9% -9.3%
19.3%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
$- $2 $4 $6 $8
$10 $12 $14 $16 $18 $20
Search Classifieds & Directories
Lead Generation
Mobile Digital Video Commercials
Ad Banners / Display Ads
Sponsorship Rich Media
2013 Revenue 2013 vs. 2012 % Growth
In b
illi
ons
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Historical trends in internet advertising formats Revenue share by major ad formats, 2006–2013
0% 5%
10% 15% 20% 25% 30% 35% 40% 45% 50%
Search Display / Banner
Mobile Digital Video Classifieds Lead Generation
Rich Media
2006 2007 2008 2009 2010 2011 2012 2013
14
% o
f tot
al r
even
ue
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Impression-based pricing shows slight uptick Internet ad revenues by pricing model, 2012 vs. 2013
32%
66%
2%
2012
Impression-based Performance-based Hybrid
33%
65%
2%
2013
Impression-based Performance-based Hybrid
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Total – $36.6 billion Total – $42.8 billion Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Historical pricing model trends Internet ad revenues by pricing model, 2005–2013
Note: Pricing models definitions may have changed over time period depicted, both within the survey process and definitional by survey respondents.
46% 48%
45%
39% 37% 33% 31% 32% 33%
41% 47%
51%
57% 59% 62%
65% 66% 65%
13%
5% 4% 4% 4% 5% 4% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013
CPM Performance Hybrid
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% o
f tot
al r
even
ue
Source: IAB/PwC Internet Advertising Revenue Report, 2013
Performance
CPM
Hybrid
PwC April 2014
Internet ad revenues by major industry category $36.6 B in 2012 vs. $42.8 B in 2013
20%
13% 12%
11%
9% 8%
7% 6%
5% 4%
21%
13% 12%
9% 8%
6% 7%
5% 5% 4%
Retail Financial Services
Auto Telecom Leisure Travel
Tech / Computing
Packaged Goods
Pharma & Healthcare
Media Entertain- ment
2012 2013
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% o
f tot
al r
even
ue †
† Amounts do not total to 100% as minor categories are not displayed.
Source: IAB/PwC Internet Advertising Revenue Report, 2013
PwC April 2014
Advertising market share by media Advertising spend † of key media in 2013 (In billions)
$0.8
$0.9
$7.9
$13.4
$16.7
$18.0
$34.4
$40.1
$42.8
Cinema
Video Game
Out of Home
Magazine (Consumer)
Radio
Newspaper
Cable Television **
Broadcast Television *
Internet
† The total U.S. advertising market includes other segments not charted here. * Broadcast Television includes Network, Syndicated and Spot television advertising revenue. ** Cable Television includes National Cable Networks and Local Cable television advertising revenue.
Source: IAB/PwC Internet Advertising Revenue Report, 2013; PwC
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PwC April 2014
Historical advertising market share Advertising spend of key media from 2005-2013 (In billions)
$0 $5
$10 $15 $20 $25 $30 $35 $40 $45 $50
2005 2006 2007 2008 2009 2010 2011 2012 2013
Broadcast Television * Cable Television ** Newspaper Radio
In b
illi
ons
* Broadcast Television includes Network, Syndicated and Spot television advertising revenue. ** Cable Television includes National Cable Networks and Local Cable television advertising revenue.
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Source: IAB/PwC Internet Advertising Revenue Report, 2013; PwC
PwC April 2014
Historical advertising market share Advertising spend of key media from 2005-2013 (In billions)
$0 $5
$10 $15 $20 $25 $30 $35 $40 $45 $50
2005 2006 2007 2008 2009 2010 2011 2012 2013
Internet Broadcast Television * Cable Television ** Newspaper Radio
In b
illi
ons
* Broadcast Television includes Network, Syndicated and Spot television advertising revenue. ** Cable Television includes National Cable Networks and Local Cable television advertising revenue.
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Source: IAB/PwC Internet Advertising Revenue Report, 2013; PwC
PwC April 2014
Historical advertising growth of media Comparative U.S. advertising media annual ad revenue growth for first 4 years (In billions)
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$0
$1
$2
$3
$4
$5
$6
$7
$8
Broadcast TV* (1949-52)
Cable TV* (1980-83)
Internet* (1996-99)
Mobile (2010-13)
Year 1 Year 2 Year 3 Year 4
123% CAGR 159% CAGR
98% CAGR
72% CAGR
Compound Annual Growth Rate (CAGR)
Sources: IAB/PwC Internet Advertising Revenue Report, 2013; McCann-Erickson * Adjusted for Inflation
PwC April 2014
PwC New Media Group As business, accounting, and tax advisors to many of the world’s leading Entertainment, Media, and Communications (EMC) and Technology (Tech) companies, PwC (www.pwc.com) has an insider’s view of trends and developments driving the industry. With approximately 1200 practitioners serving EMC and Tech clients in the United States, PwC is deeply committed to providing clients with industry expertise and resources. In recent years, our pioneering work in EMC and Tech has included developing strategies to leverage digital technology, identifying new sources of financing, and marketplace positioning in industries characterized by consolidation and transformation. Our experience reaches across all geographies and segments of the EMC and Tech sectors, including broadband, wireless, the Internet, music, film, television, publishing, advertising, gaming, theme parks, computers and networking, and software. With thousands of practitioners around the world, we are always close at hand to provide deep industry expertise and resources.
PwC’s New Media Group was the first practice of its kind at a Big Four firm. Currently located in New York, Los Angeles, Boston, Seattle and the Bay Area, our New Media Group includes accounting, tax and consulting professionals who have broad and deep experience in the three areas that converge to form new media: advanced telecommunications, enabling software and content development/distribution.
Our services include:
• Business assurance services
• Web audience measurement and advertising delivery auditing and advisory
• IAB Measurement Certification Compliance auditing
• Privacy policy structuring, attestation and compliance advisory
• Mergers & Acquisition assistance
• Tax planning and compliance
• Capital sourcing and IPO assistance 22
PwC April 2014
PwC New Media Group Contacts
For information about our New Media Group, contact one of the following PwC professionals: New York David Silverman Partner, Assurance Services 646.471.5421 [email protected] York Russ Sapienza Partner, Advisory Services 646.471.1517 [email protected] Michael Altschul Manager, Advisory Services 646.471.4903 [email protected]
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www.pwc.com/e&m
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