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IAB Europe Adex Benchmark 2013
Daniel Knapp Director Adver=sing Research IHS
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ABOUT THE STUDY
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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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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
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Added format granularity & context
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BIG PICTURE & CONTEXT
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The value of online adver=sing in 2013
€27.3bn
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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
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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
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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
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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
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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
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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)
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However, no one online category has yet surpassed Newspapers ad spend
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
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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
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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
6,383
4,253
3,343
1,454
1,503
1,199
859
911
618
589
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
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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
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Growth hurdles
AQrac8ng brand spend online
Measurement
Mobile
Video inventory – s8ll very limited
TV dominance in some European markets
Data literacy
Regula8on
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Mix of CEE and WE markets above European average; Russia and Turkey only 2 markets above 20%
26.8%
24.3%
17.3%
16.2%
16.0%
15.7%
14.7%
13.4%
13.3%
13.0%
12.9%
11.9%
11.4%
11.1%
10.9%
10.7%
10.0%
9.8%
9.4%
6.9%
6.6%
6.2%
4.5%
4.3%
3.0%
-‐1.1%
-‐2.0%
-‐5%
0%
5%
10%
15%
20%
25%
30%
Online ad growth like-‐for-‐like (yoy)
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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
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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
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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 (%)
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FORMATS
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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
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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
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A renaissance of Display adver=sing: mature markets saw strongest growth in 2013
32.3%
28.3%
28.0%
25.9%
24.9%
24.7%
18.7%
15.9%
14.9%
13.4%
13.4%
12.4%
12.3%
11.4%
9.3%
9.3%
8.7%
8.1%
5.2%
4.9%
4.8%
2.7%
-‐0.2%
-‐0.7%
-‐2.0%
-‐3.1%
-‐5.4%
-‐10%
-‐5%
0%
5%
10%
15%
20%
25%
30%
35%
Display adver8sing growth year-‐on-‐year (%)
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Online video is now a significant part of Display adver=sing
29.0%
20.5%
20.5%
19.1%
16.2%
16.2%
15.3%
15.2%
15.0%
14.4%
13.5%
13.1%
12.7%
11.7%
11.0%
10.3%
8.8%
8.1%
5.4%
4.5%
2.9%
2.9%
2.2%
0%
5%
10%
15%
20%
25%
30%
35%
Video share of Display
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Growth in video strong, but no country achieves triple-‐digit growth
94.1%
75.4%
71.3%
70.6%
70.2%
62.6%
60.0%
54.4%
52.0%
50.0%
46.4%
45.4%
40.5%
39.7%
32.0%
29.3%
26.4%
24.6%
24.1%
20.0%
4.3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Online video growth year-‐on-‐year (%)
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Video ad spend mirrors total online ad spend ranking
356.6
153.0
139.0
132.3
85.6
80.7
43.9
34.8
29.4
28.2
25.1
16.8
12.7
10.9
9.6
9.1
8.8
4.0
3.3
1.7
0.8
0
50
100
150
200
250
300
350
400
Online video ad spend (€m)
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Mobile now has a double-‐digit share of online display
25.1%
16.4%
13.5%
11.5%
9.5%
9.2%
9.2%
9.0%
8.7%
6.7%
5.4%
5.0%
4.9%
4.6%
3.4%
3.1%
2.8%
2.2%
2.1%
1.4%
1.2%
0.7%
0%
5%
10%
15%
20%
25%
30%
Mobile display as a share of total Display
2012 2013
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This is more evident…
32.3%
28.3%
25.9%
24.7%
18.7%
15.9%
13.4%
13.4%
12.4%
11.4%
9.3%
9.3%
5.2%
4.8%
2.7%
-‐0.2%
-‐2.0%
-‐3.1%
-‐5.4%
-‐10% -‐5% 0% 5%
10% 15% 20% 25% 30% 35%
Display year-‐on-‐year growth (%)
Display including mobile
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…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
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Mobile is most important growth engine for online display
European Display with
mobile: +14.9%
European Display without mobile: +1.1%
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Classifieds & Directories struggled in 2013 with 11 countries experiencing decline
30.3%
26.1%
24.8%
20.0%
11.5%
9.4%
8.4%
6.8%
5.6%
4.9%
4.3%
3.6%
3.6%
3.3%
2.0%
-‐0.2%
-‐0.6%
-‐1.7%
-‐1.7%
-‐2.0%
-‐2.1%
-‐3.4%
-‐7.3%
-‐16.2%
-‐18.7%
-‐20.5%
-‐30%
-‐20%
-‐10%
0%
10%
20%
30%
40% Classifieds & Directories year-‐on-‐year growth (%)
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Con=nued growth in Paid-‐for-‐search shows the success of the format
34.4%
26.6%
26.1%
22.3%
20.9%
20.8%
19.0%
18.9%
18.5%
18.2%
15.0%
14.3%
13.6%
13.5%
13.0%
12.0%
9.7%
6.0%
6.0%
5.5%
5.2%
4.7%
3.7%
3.7%
1.1%
-‐2.0%
-‐5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Paid-‐for-‐search year-‐on-‐year growth (%)
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Like in Display, Mobile is now a significant driver of Paid-‐for-‐search
25.3%
20.0%
16.8%
12.6% 12.4% 9.8% 9.0%
4.5% 2.4%
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 (%)
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OUTLOOK
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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
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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
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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