IAB Ireland PwCOnline Adspend Study Full Year 2012

Suzanne McElligottCEO, IAB IrelandApril 18th, 2013

In association with:

Agenda

1. Introduction2. Study Methodology3. Market Background4. Online Adspend Results5. Mobile Adspend Results6. Looking ahead…7. Questions

1. Introduction

Census of all major Irish online media owners Includes online and mobile 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.)

2. Study Methodology Internationally, IAB has been working with PwC since

1997 to survey the value of online adspend in Europe and North America.

In our study, 28 leading publishers participated, representing multiple websites.

13 sales houses and ad networks also participated

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

Survey participants AD2ONE Ireland, Adconion, Adforce, Brightroll, BSkyB, Buy

and Sell, CarsIreland.ie, communicorp, Crimtan, Digitize New Media Ltd, Distilled Media, Donedeal.ie, eircom, Electric Media Sales, Entertainment.ie, Facebook *, FCR Media (Goldenpages), Flashpoint, Google *, Gradireland, Homewise, i-Believe, Independent Digital, Irishracing.com, Linkedin, Media Brokers, Microsoft Advertising, MyHome.ie, O2 Media, OnlineTradesmen.ie, Page7 Media, Pigsback, Rollercoaster.ie, RTÉ *, saongroup.com, Specific Media, TCH, The Irish Times, Ticketmaster Ireland, TradeDoubler Ireland Ltd, Trader Media Group, TV3, Twitter *, Yahoo!

* Estimates

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

Estimates have been included for Google and Facebook based on consultation with industry representatives.

IAB’s advisory council is comprised of Aegis Media, Core Media and Group M.

Digital Adspend

• Traditional online advertising viewed on a desktop PC or laptop, accessed via the Internet connection

• Only media spend reported to ensure fair comparison to other media including – Display advertising– Search– Classified

Online

• Advertising that has been specifically tailored and served on a mobile device including tablet, accessed via 3G or wifi

• Only media spend reported to ensure fair comparison to other media including– Display advertising (including SMS/MMS)– Search

Mobile / Tablet

3. Market Background

Annual Growth Rate Graph 2007 – 2012 ( issued Thurs 21.03.13)

Exports performed positively in 2012

Second successive year of growth of GDP following 3 years of decline.

Distribution, Transport, Software and Communications sectors were themain contributor to growth in 2012

Domestic Demand remains very weak – personal consumption down 0.9%

CSO Quarterly National AccountsQuarter 4 2012 and Year 2012 (Preliminary)

2008 2009 2010 2011 2012

-9.0

-8.0

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

Annual Growth RatesGDP

GNP % Change

2009 2010 2011 2012GDP -5.5% -0.8% 1.4% 0.9%

GNP -8.1% 0.9% -2.55 3.4%

Consumer Confidence Nielsen Irish consumer confidence indexed at 65 in Q4 2012, a two-

point decline from Q3 2012, however an increase of five points from Q4 2011 (Nielsen) *

This is an improvement relative to a year ago, however consumer spending power remains under pressure.

Outlook on Job prospects and personal finances in Ireland is behind global average - The latest Q4 2012 survey revealed there is still a recessionary mind-set (95 percent).

* Source: Nielsen Global Consumer Confidence Survey Q4 2012 – Ireland Results

‘Caution is expected in the first quarter of 2013. However if things improve, consumer confidence could rebound later on in the year. There are signs 2013 could be a turning point for the irish domestic economy, and on the back of that we may see some strong consumer spending resume.‘ Karen Mooney, Nielsen

Nielsen 2012 Adspend in Other Media

Grand Total

Press

TV

Radio

Outdoor

Cinema

-6.2

-6.5

-6.8

-4.4

-5.2

0.9

% change other media adspend yoy - Nielsen

Source: Nielsen All Media Spend Full year 2012

€794m

€355m

€273m

€82.5m

€77m

€5.9m

Source: Alternatives Marketing Watch Survey December 2012

Business Performance 2012 vs 2010 and 2011

Business Improved0

10

20

30

40

50

60

Dec-10Dec-11Dec-12

55% of senior marketers say their business hasimproved in 2012

A further 31% said it remainedthe same as in 2011

What’s driving online Adspend?Marketing Strategies 2013

Where Marketing Spend was increased

% respondents increasing spend

Digital 80%

DM / Email Marketing 39%

CRM 38%

PR 33%

Research 31%

80% of medium / large businesses say they are increasing spend on Digital

Source: Alternatives Marketing Watch Survey December 2012

What’s driving Online Adspend?Audience

Total adult Ireland population of 3.7 million

2.6m total unique visitors in Ireland. Growth of 10% over past year. (comScore)

Ireland is joint third fastest growing Market in Europe (after Italy, Russia and joint with Portugal)

19.5 average hours spent online per

person per week in Ireland (comScore)

Smartphone penetration in Ireland:

43%

61% access the Internet every day on their smartphone

(2012 Our Mobile Planet Smartphone Research)

Device Share of Page Views Across Europe

Source: comscore Europe Digital Future In focus 2013

Ireland, UK and Russia skewing above average for Internet access via Mobile and Tablet

What’s driving online adspend? Technology and Innovation

Broadband penetration in Ireland is stable at 65% EU 27: 72% (comreg key data report q4 2012)

Enthusiasm for all things Digital 44% of adults say Internet has made family life better

(UPC Report) 50% of householders expect to own a tablet / iPad

(UPC Report)

More choice for Brands / Innovation Richer Ad Formats – home page takeovers, carousel,

billboard, slider Video on Demand Mobile Opportunities

4. IAB Ireland Online Adspend Full Year 2012

Gross Online Adspend(like for like growth excluding Mobile)

€148.2M

Online Revenue: 2011 vs 2012

€ million

Full year like for like adspend120

125

130

135

140

145

150

2011 2012

12.3% Increase

On a like for like basis(Excluding Mobile)

2009 2010 2011 2012

0

20

40

60

80

100

120

140

160

H1

Full Year

H1Full Year

+ 13.5% yoy2009 to 2010

+ 19.6% yoy2010 to 2011

+ 12.3% yoy 2011 to 2012

Online Adspend 2009-2012 (like for like, excluding mobile)

Sources: IAB PwC Adspend Studies 2009-2012

H1 Full year

2009 €48m €97.2m

2010 €53.9m €110m

2011 €64.9m €132m

2012 €73.2m €148m

Digital Media Mix Full Year 2012

€ million

Breakdown by advertising format based on figures provided - based on 98.7% of the overall total.

45%

(€66.6m) 34%

(€50.6m)

20%(€28.9m)

1%, (€2m)

Search

Display

Classified

Other (not allocated)

45%

34%

20%

1%

Digital Media Mix Full Year 2011

€ million

Breakdown by advertising format based on figures provided – based on 93% of overall total.

41%(€53.9m)

36%(€47.8

m)

19%(€25.6

m)

4%(€4.7m)

Search

Display

Classified

Not Allocated

41%

36%

19%

4%

Social Media Display Advertising in 2012

€ 6.3m*

*Based on figures submitted for Boards.ie, Linkedin Facebook, Twitter, Youtube and Industry estimates. Prepared in consultation with industry representatives.

9% Increase from €5.8m* in 2011

Display Breakdown 2012

€ million

Breakdown by advertising format based on figures provided - 100% of display.

72%

10%

10%

4%

2% 2%

Embedded formats

Pre/Post roll video

Sponsorships and tenancy

Display affiliate advertising

Interruptive formats

Email advertising

72%

10%

10%

4%

2%

2%

Display Breakdown 2011

€ million

Breakdown by advertising format based on figures provided - 100% of display.

76%

9%

10%

2%

1%

2%

76%

9%

10%

2% 1% 2%Embedded formats

Pre/Post roll video

Sponsorships and tenancy

Display affiliate advertising

Interruptive formats

Email advertising

Industry Categories - Display

Top Performers in Display 2012

FMCG (15%) Finance (12%) Telecomms (11%) Automobile(10%) Retail (9%)

Industry Categories - Display Top Performers in Display 2011

Telecomms (15%) FMCG (11%) Entertainment & Media (11%) Finance (10%) Auto (10%) Retail (10%)

Industry Breakdown for Display 2012

Breakdown by advertising format based on figures provided – 76% of display.

3%

15%

12%

11%

10%9%

9%

7%

6%

4%

4%

3%

3% 2.5% 2%2%

FMCG

Finance

Telecomms

Automobile

Retail

Entertainment & Media

Travel

Alcohol

Other

Government/Public Service

Technology

Utilities

Gambling

Education and Training

Recruitment/Property

15%

12%

11%

10%

9%

9%

7%

6%

4%

4%

3%

3%

2.5%

2%

2%

Industry Breakdown for Display 2011

Breakdown by advertising format based on figures provided – 81% of display.

12%

11%

11%

10%

10%

10%

7%

7%

6%

4%3%

3%3%

2%2%

Telco.

FMCG

Entertainment and Media

Finance

Auto.

Retail

Other

Travel

Alcohol

Gov/Public Sector

Recruitment

Technology

Utilities

Education and Training

Gambling

12%

11%

11%

10%

10%

10%

7%

7%

6%

4%

3%

3%

3%

2%

2%

Industry Categories – Classified 2012

Top Performers in Classified 2012

Automobile (36%)

Recruitment and Property (34%)

Industry Categories – Classified 2011

Top Performers in Classified 2011

Recruitment and Property (35%)

Automobile (29%)

5. IAB Ireland Mobile Adspend Full Year 2012

Gross Mobile Adspend

€9.9M

Mobile Adspend by type 2012

82%€8.1

m

18%€1.8

m

_x000f_Display/SMS/MMS

_x0006_Search

82%

18%

Industry Categories Mobile Display / SMS / MMS Adspend

Top Performers in Mobile Display / SMS / MMS 2012

FMCG (28%) Retail (20%) Alcohol (16%) Travel (12%) Entertainment & Media (11%)

Mobile Adspend by Industry Category 2012

28%

20%

16%

12%

11%

4%

3%2% 1% 1% 1% 0.5% 0.4% 0.3% 0.2%

FMCG

Retail

Alcohol

Travel

Entertainment & Media

Automobile

Other

Finance

Telecomms

Education & Training

Recruitment/Property

Gambling

Government/Public Service

Technology

Utilities

Mobile Display / SMS / MMS28%

20%

16%

12%

11%

4%

3%

2%

1%

1%

1%

0.5%

0.4%

0.3%

0.2%

IAB PwC Online Adspend 2012

Gross Online Adspend including Mobile

Adspend for 2012:

€158M

6. Looking Ahead

54% predict growth

or strong growth

3%

51%30%

16%

Sector growth potential over next 6 months

Strong growthGrowthStableDeclineStrong Decline

Drivers of growth in adspend

Mobile

Richer Ad formats

Video

Real time bidding

Q. What do you see as being the most important in driving your company's revenue growth?

Barriers to growth

Economic Climate

Digital strategy not prioritised in companies

Need for further training/knowledge

Insufficient data in the Irish market

Cost to the advertiser

Respondents’ view of the most significant barriers to growth

Next Study

Next IAB PwC Study - H1 2013

November 2013

Questions?

Many thanks to: All of our Adspend participants

Nuala Nic Ghearailt, PwC

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