IAB Ireland / PwC Online Adspend Study for H1 2016

Launched 27th October 2016

Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

2

Introduction

• Survey of all major Irish online media owners

• Includes desktop and mobile adspend in the Republic of Ireland

• Information collected each half year

• Analysis available by:

- Category (Display, Search and Classified)

- Format (embedded, pre-roll / post-roll, etc.)

- Industry sector (FMCG, Finance, Telco, etc.)

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Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

4

Study Methodology

• Internationally, IAB has been working with PwC since 1997 to survey the value of online adspend in Europe and North America.

• Our study includes data from 27 leading publishers, representing multiple websites.

• 10 sales houses and ad networks also participated.

• All data was provided to PwC on a confidential basis. The analysis is prepared by PwC based on the figures provided by participants, which have not been independently verified or audited by PwC.

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Participating Publishers

* Data Source from RTE’s Annual Report 2015

*

6

Participating Adnetworks, Agencies & Social Media / Search Companies

* *

*

*Based on actual spend via agency data and consultation with social media and search companies

*

*

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Study Content

• Total advertising revenue is reported on a gross actual basis (including agency commission).

• The figures are drawn up on the basis of actual revenues submitted by the study participants.

• Data has been included for Google, Facebook, Twitter and other social media platforms based on consultation with advertising agencies and industry representatives.

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Digital Adspend

Desktop: Traditional online advertising viewed on a desktop PC or laptop, accessed via an Internet connection:

• Display advertising (embedded, interruptive, social, VoD, email, display affiliate, native, etc.)

• Search

• Classified

Mobile/Tablet advertising that has been specifically tailored for and served on a mobile/tablet device and accessed via 3G or wifi:

• Display advertising (rich / non-rich formats, SMS, Social Media, in-app advertising, native, VoD, etc.)

• Search

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Explanation of Native

1. Discovery/recommendation units - are integrated into a web page, however, they do not mimic the appearance of editorial content feed; typically link to a page off the publisher's site. e.g. Outbrain and Taboola.

2. ‘In Feed’ publisher controlled - this form of native advertising is written in partnership with the publisher and the content looks like the surrounding editorial.

3. ‘In Feed’ advertiser controlled - this content is produced by the advertiser and it looks like the surrounding editorial in the feed.

4. Customized integration/innovation formats - these advertising units don't fit neatly into the categories above and they may involve custom playlists or may be platform specific.

Types of Native Advertising

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Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

11

Market Background

Source: Nielsen Ireland Consumer Confidence Q2 2016 12

Market Background

Source: Nielsen Ireland Consumer Confidence Q2 2016 13

The Mobile Opportunity for Brands

* Reuters Institute Digital News Report: Ireland 2016 ** Consumer Barometer 2016 *** Virgin Media Digital Insights Report 2016

WE LOVE

OUR

SMART

PHONES!

80% of Irish use a smartphone - up from 75% in 2015 *

62% have 3 or more connected devices**

65% feel more connected to family through digital communications***

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Smartphones are a Key Influencer on Path to Purchase!

Source: ** Google Consumer Barometer 2016 * Virgin Media Digital Insights Report 2016

50% of people compared products/prices/features online via a smartphone**

27% get ideas / inspiration online on smartphones**

25% looked for opinions, reviews, advice online**

Virgin Media predict that the value of online spending will almost double between now and 2021 from €7.5b to

€14.1b*

About 60% of Irish online shopping still goes abroad*

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Watching Video on Demand has become Mainstream

* Virgin Media Digital Insights Report 2016 ** IAB Ireland report: The Power of VOD 3, conducted by Nielsen June 2016

61% of Irish adults spend more than 4 hours a week consuming video streaming content*

Video advertising delivers hard to reach audiences, 59% of 15-24 year olds watch more VOD than TV**

Video advertising drives brand growth - following seeing a video ad 24% of adults visit the brand’s website and 20% search online for the brand**

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Marketers Increasing Focus on Digital

Digital is the top focus for marketing spend for Irish marketers in 2016

Digital was ranked the top area for marketing spend for Irish marketers in 2016 by 73% of the respondents to the

Alternatives/ MII Sentiment Survey 2016

28% of Irish marketers will dedicate between 21% and 50% of their marketing budget to digital in 2016

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Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

18

IAB Ireland Online Adspend

€216.0mGross Online

Adspend

€107.5mDesktop

€108.5mMobile

+ 33%versus H1 2015

Source: IAB / PwC Digital Adspend H1 2016 19

Source: IAB / PwC Digital Adspend H1 2016

67%Increase in mobileon a like for like basis

11%Increase in desktopon a like for like basis

Online Adspend, H1 2015 vs H1 2016

IAB Ireland Online Adspend

20

7793 97 108

16

37

65

109

92.9

129.8

162.0

216.0

2013 H1 2014 H1 2015 H1 2016 H1

Desktop Mobile

Adspend by Format (Desktop & Mobile)

Source: IAB / PwC Digital Adspend H1 2016

Historic online Adspend by Format (€m), H1 2013 – H1 2016

+ 33%

+ 67%

+ 11%

+ 25%

+ 72%

+ 5%

+ 40%

+ 132%

+ 20%

+ 19%

+ 236%

+ 5%

21

107.8

93.8

14.4

Digital Media Mix (Desktop & Mobile)

Total online Adspend by Digital Media Mix (€m), H1 2016

50%Search

43%Display

7%Classified

€216.0mTotal

Source: IAB / PwC Digital Adspend H1 2016 22

4571

89108

34

45

59

94

14

14

14

14

92.9

129.8

162.0

216.0

2013 H1 2014 H1 2015 H1 2016 H1

Search Display Classified

Digital Media Mix (Desktop & Mobile)

Source: IAB / PwC Digital Adspend H1 2016

Historic online Adspend by Digital Media Mix (€m), H1 2013 – H1 2016

+ 33%

+ 59%

+ 21%

+ 25%

+ 30%

+ 25%

+ 40%

+ 34%

+ 58%

23

5%

2%

2%

3%

3%

4%

4%

7%

8%

10%

11%

12%

13%

15%

Other

Property & Recruitment

Education & Training

Gambling

Technology

Government/Public Service

Alcohol

Travel

Entertainment & Media

Auto

FMCG

Telecoms & Utilities

Retail

Finance

Spend by Industry (Desktop & Mobile)

Note: (1) Figures based on 43% of reported display revenue for H1 2016; excludes social mediaSource: IAB / PwC Digital Adspend H1 2016

Display Adspend by Industry, H1 2016(1)

24

6 7 5 53 3 3 6

47 11

2121

28 24

2616

37

34

45

59

94

2013 H1 2014 H1 2015 H1 2016 H1

Native (incl. social in-feed)

Embedded, social display and GDN

Pre/post roll video (incl. social VoD)

Interruptive

Other

Display Spend Type (Desktop & Mobile)

Note: (1) Other includes: tenancy, email, display affiliate, SMS, fixed in-game and dynamic in-gameSource: IAB / PwC Digital Adspend H1 2016

Historic online Adspend by Spend Type (€m), H1 2013 – H1 2016+ 59%

+ 128%

+ 9%

+ 89%

+ 59%+ 4%

(1)

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Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

26

62.8

45.2

0.5

58%Search

42%Display

Digital Media Mix (Mobile)

Mobile online Adspend by Digital Media Mix (€m), H1 2016

€108.5mTotal

(1) c. €0.5 classified spend on mobile. Remaining c.€13.9m classified spend is on DesktopSource: IAB / PwC Digital Adspend H1 2016 27

(1)

1129

4663

5

8

20

45

16.0

37.2

65.0

108.5

2013 H1 2014 H1 2015 H1 2016 H1

Search Display

Digital Media Mix (Mobile)

Source: IAB / PwC Digital Adspend H1 2016

Historic online Adspend by Digital Media Mix (€m), H1 2013 – H1 2016

+ 67%

+ 132%

+ 38%

+ 73%

+ 138%

+ 55%

+ 132%

+ 163%

+ 60%

28

1 1 1 10 0 1 21 24

11

35

5

68

25

5

8

20

45

2013 H1 2014 H1 2015 H1 2016 H1

Native (incl. social in-feed)

Embedded, social display and GDN

Pre/post roll video (incl. social VoD)

Interruptive

Other

Display Spend Type (Mobile)

Note: (1) Other includes: tenancy, email, tablet, mobile content and SMSSource: IAB / PwC Digital Adspend H1 2016

Historic online Adspend by Spend Type (€m), H1 2013 – H1 2016

+ 136%

+ 197%

+ 33%

+ 150%

+ 167%- 4%

(1)

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Contents

1. Introduction

2. Study Methodology

3. Market Background

4. Online Adspend Results

5. Mobile Adspend Results

6. Growth Drivers

30

Social Media (Desktop & Mobile)

*Social media display includes social media VoD. Data is based on actual spend figures submitted by Ad Agencies and consultations with social media companies.Source: IAB / PwC Digital Adspend H1 2016

€50.8m*

Up 130% on €22.1m* in H1 2015

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Pre/Post Roll Video (Desktop & Mobile)

*Includes Social Media VoDSource: IAB / PwC Digital Adspend H1 2016

€20.8m*

Up 89% on €11m* in H1 2015

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Native Advertising (Desktop & Mobile)

€36.6m*

This represents 39% of total digital display advertising

revenue up 129% on €16.0m in H1 2015

*Native advertising includes: ‘in-feed’ publisher controlled content, ‘in-feed’ advertiser controlled content, discovery/recommendation units and customised / innovation formatsSource: IAB / PwC Digital Adspend H1 2016 33

Digital Formats (Desktop & Mobile)

Note: all formats are not mutually exclusive – there is some overlap. All growth figures are cross platform *Includes Social VoD, ** Includes Social and VoDSource: IAB / PwC Digital Adspend H1 2016

130%

89%

67%59%

21%

Social Media* Video on Demand(VOD)*

Mobile All Display** Paid Search

YoY Growth Rates H1 2016

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Questions?

Many thanks to:

• All of our Adspend Participants.

• Richard Phelan, Ross Moylan and Nuala Nic Ghearailt, PwC.

For More go to www.iabireland.ie or email info@iabireland.ie

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