IAB Europe AdEx Benchmark 2013

The online advertising landscape in Europe

2

ABOUT THE STUDY

3

A meta-analysis of online ad spend in Europe

RATECARD

Campaigns x Ratecard

GROSS

Revenue Billed

NET

Revenue Billed No Agency commissions

4

Submissions from 26 European countries

• Austria• Belgium• Bulgaria• Czech Republic• Croatia• Denmark• Finland• France• Germany• Greece• Hungary• Ireland• Italy

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

5

BIG PICTURE & CONTEXT

6

The value of online advertising in 2013

€27.3bn

7

Eurozone economy is coming out of a double-dip recession20

04 Q

120

04 Q

220

04 Q

320

04 Q

420

05 Q

120

05 Q

220

05 Q

320

05 Q

420

06 Q

120

06 Q

220

06 Q

320

06 Q

420

07 Q

120

07 Q

220

07 Q

3 20

07 Q

420

08 Q

120

08 Q

220

08 Q

320

08 Q

420

09 Q

120

09 Q

220

09 Q

320

09 Q

420

10 Q

120

10 Q

220

10 Q

320

10 Q

420

11 Q

120

11 Q

220

11 Q

320

11 Q

420

12 Q

120

12 Q

220

12 Q

320

12 Q

420

13 Q

120

13 Q

220

13 Q

320

13 Q

420

14 Q

1

-8

-6

-4

-2

0

2

4

6GDP Growth in Europe (%)

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

8

In a volatile market, online advertising is up double-digit

2012 20130

5

10

15

20

25

30

35

€ 24.4€ 27.3

Total online advertising (€bn)

11.9% like-for-like

9

Online ad spend in Europe increased 4-fold since 2006

2006 2007 2008 2009 2010 2011 2012 20130

5

10

15

20

25

30

35

€ 6.6

€ 9.2

€ 14.5€ 15.8

€ 18.8

€ 21.9

€ 24.4

€ 27.3

Total online advertising spend in Europe (€bn)*

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

10

Online lifted overall ad spend as other media succumbed to economy and structural challenges

WE CEE Total Europe

-10%

-5%

0%

5%

10%

15%

20%

25%

-7.8%

-2.5%

-6.7%

10.8%

21.2%

11.5%

-2.5%

1.8%

-1.7%

2013: advertising year-on-year growth

Total excl. online Online Total

11

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

Cinema

Radio

OOH

Magazines

Newspapers

Online

TV

0 5 10 15 20 25 30 35

0.7

5.2

7.6

9.1

20.0

27.3

32.3

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

12

Over half of all European ad spend comes from three markets

Top 3 Top 5 Top 7 Top 100%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

57.3%

69.4%

77.9%

86.6%

56.9%

69.9%

78.2%

86.4%

Share of European online revenue by market

2012 2013

13

After a tough year, Spain hindered by economic crisis and Sweden increases in rank

UK Germany France Russia Italy Netherlands Sweden Spain Norway Denmark0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

6,38

3

4,25

3

3,34

3

1,45

4

1,50

3

1,19

9

859

911

618

589

7,38

1

4,67

6

3,49

4

1,84

3

1,70

3

1,31

2

955

901

709

628

Total online ad spend (€m)

2012 2013

14

Growth drivers

Social media

Video

Rich media

Mobile internet penetration increasing across all of Europe

Programmatic and RTB come into the mainstream

E-commerce driving C&D growth

15

Growth hurdles

Attracting brand spend online

Measurement

Mobile

Video inventory – still very limited

TV dominance in some European markets

Data literacy

Regulation

16

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

-5%

0%

5%

10%

15%

20%

25%

30%

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

%

Online ad growth like-for-like (yoy)

17

- 20 40 60 80 100 120

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

BulgariaCroatia

Czech Republic

DenmarkFinland

France

GermanyGreece

Hungary

Ireland

Italy

Netherlands

Norway

PolandRomania

Russia

Serbia

Slovenia

Spain

Austria

Belgium

Sweden

Switzerland

Turkey

UK

Slovakia

Onl

ine

ad m

arke

t gro

wth

Online ad spend per capita (€)

Bubble size: market value in €m

18

Uniform growth patterns in 2013

0 5 10 15 20 25 30

-20%

-10%

0%

10%

20%

30%

40%

50%

Online advertising growth year-on-year (%)

2012 2013

19

FORMATS

20

Acceleration in Display growth, Display and Search drove online ad spend in 2013

Display Classifieds & Directories Paid-for-search Total0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

9.1%

6.3%

15.5%

11.5%

14.9%

3.6%

13.0%11.9%

Year-on-year growth (%)

2012 2013

21

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

2006 2007 2008 2009 2010 2011 2012 20130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

47.5% 48.2% 43.8%32.2% 31.0% 32.7% 32.4% 33.8%

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%

Format shares of total online

Display Classifieds & Directories Paid-for-search Other

22

A renaissance of Display advertising as even mature markets post high growth

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

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

%

Display advertising growth year-on-year (%)

23

Online video is now a significant part of Display advertising

Slove

nia

Switz

erland UK

Italy

Netherlands

Russia

Poland

Ireland

Sweden

France

Turkey

Europe

Germany

Greece

Norway

Finland

Austria

Spain

Czech

Republic

Denmark

Romania

Hungary

Bulgaria0%

5%

10%

15%

20%

25%

30%

35%

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%

Video share of Display

24

Video ad spend mirrors total online ad spend ranking

UK

Germany

France Ita

ly

Netherlands

Russia

Sweden

PolandSp

ain

Turkey

Norway

Switz

erland

Finland

Austria

Czech

Republic

Denmark

Ireland

Greece

Slove

nia

Hungary

Romania0

50

100

150

200

250

300

350

400

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

Online video ad spend (€m)

25

Mobile now has a double-digit share of online display

UK

Norway

Ireland

Europe

Netherlands

Sweden

France

Spain

Finland

Hungary

Denmark

Austria

Germany

Slove

niaIta

lySe

rbia

Turkey

Czech

Republic

Croatia

Poland

Bulgaria

Romania0%

5%

10%

15%

20%

25%

30%

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%

Mobile display as a share of total Display

2012 2013

26

This is more evident…

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

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

%

Display year-on-year growth (%)

Display including mobile

27

…when we remove Mobile from Display

Turkey

Austria UK

Norway

Czech

Republic

Romania

Finland

Poland

Sweden

Serb

ia

Netherlands

Germany

France

Hungary

Denmark

Bulgaria

Slove

nia

Croatia

Spain

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Display year-on-year growth (%)

Display including mobile Display without mobile

28

Mobile is most important growth engine for online display

European Display with

mobile: +14.9%

European Display without mobile: +1.1%

29

Classifieds & Directories struggled in 2013 with 11 countries experiencing decline

-30%

-20%

-10%

0%

10%

20%

30%

40%

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%

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

30

Continued growth in Paid-for-search shows the success of the format

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

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

%

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

31

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

Ireland Austria UK Europe Sweden Germany France Hungary Spain0%

5%

10%

15%

20%

25%

30%

25.3%

20.0%

16.8%

12.6% 12.4%

9.8%9.0%

4.5%

2.4%

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

You can download the full study here

Contact:Alison Fennah, IAB Europe – fennah@iabeurope.eu Daniel Knapp, IHS – daniel.knapp@ihs.com

@IABEurope

IAB Europe

www.iabeurope.eu