IAB Europe AdEx Benchmark 2013 July 2014

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 recession

-8

-6

-4

-2

0

2

4

6

20

04

Q1

20

04

Q2

20

04

Q3

20

04

Q4

20

05

Q1

20

05

Q2

20

05

Q3

20

05

Q4

20

06

Q1

20

06

Q2

20

06

Q3

20

06

Q4

20

07

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

08

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

09

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

11

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

12

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

13

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

14

Q1

GDP 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

€ 24.4

€ 27.3

0

5

10

15

20

25

30

35

2012 2013

Total online advertising (€bn)

11.9% like-for-like

9

Online ad spend in Europe increased 4-fold since 2006

€ 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 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

-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: 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

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)

12

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

13

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

6,3

83

4,2

53

3,3

43

1,4

54

1,5

03

1,1

99

85

9

91

1

61

8

58

9

7,3

81

4,6

76

3,4

94

1,8

43

1,7

03

1,3

12

95

5

90

1

70

9

62

8

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

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%

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)

17

Bulgaria

Croatia

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

Onlin

e a

d m

ark

et gro

wth

Online ad spend per capita (€)

Bubble size: market value in €m

18

Uniform growth patterns in 2013

-20%

-10%

0%

10%

20%

30%

40%

50%

0 5 10 15 20 25 30

Online advertising growth year-on-year (%)

2012 2013

19

FORMATS

20

Acceleration 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

21

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

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%

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

22

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

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 advertising growth year-on-year (%)

23

Online video is now a significant part of Display advertising

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

24

Video ad spend mirrors total online ad spend ranking

35

6.6

15

3.0

13

9.0

13

2.3

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)

25

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

26

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

27

…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

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

.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 (%)

30

Continued 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 (%)

31

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 (%)

Contact: Alison Fennah, IAB Europe – fennah@iabeurope.eu Daniel Knapp, IHS – daniel.knapp@ihs.com To request the full report please contact adex@iabeurope.eu