IAB Italy Forum 25 November 2014

Townsend Feehan, CEO, IAB Europe

•  Snapshot of Q3 ad spend trends in Europe, projections to 2018

•  Device penetration •  How IAB Europe’s substantive policy and industry

promotion work aim to help drive continued growth

IAB Italy Forum Townsend Feehan, CEO, IAB Europe

IAB Italy Forum | 2

Online to overtake TV by end 2014 as print is squeezed, but TV and online are more friend than foe

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Western Europe: Net advertising revenue by media

other media

print

online

television

IAB Italy Forum | 3 Source: IHS

Market dynamics differ internationally – online proportionally more important in Europe*

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

TV Online

US: net ad revenue in 2013

(€m)

Broadcast Cable

Video Other Display

Search

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

TV Online

European Big 5: net ad revenue in

2013 (€m)

Broadcast Cable

Video Other Display

Search

0

2.000

4.000

6.000

8.000

10.000

12.000

TV Online

LATAM: net ad revenue in 2013

(€m)

Broadcast Cable

Video Other Display

Search

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

TV Online

China: net ad revenue in 2013

(€m)

Broadcast Cable

Video Other Display

Search

*note that scales vary by region – caution when comparing market sizes across regions IAB Italy Forum | 4

Source: IHS

Online growth will be driven mainly by transactional mechanisms (programmatic), mobile and video formats

4,2%

11,2%

11,5%

21,1%

51,0%

72,8%

0% 10% 20% 30% 40% 50% 60% 70% 80%

C&Ds

Search

Display

Video

Mobile Display

Programmatic buying

2014 year-on-year growth (%)

IAB Italy Forum | 5 Source: IHS

Online video advertising revenue will cross the €2bn mark in 2015 and growth will not fall below 9% by 2020

0%

20%

40%

60%

80%

100%

120%

140%

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Western Europe: net online video ad revenues (€m)

IAB Italy Forum | 6 Source: IHS

Mobile advertising exploded in 2013, and market will triple by 2020

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Europe: net mobile advertising revenues (€m)*

*includes display, search, messaging IAB Italy Forum | 7

Source: IHS

The average European household will have nearly 6 connected devices by 2018

1 Smart TV for every 2 households

Nearly 3 smartphones per household

1 games console per 10 households

Over 1 PC per household

1 DMA per 10 households

1 tablet for every 2 households

1 STB per 4 households

IAB Italy Forum | 8 Source: IHS

The device universe is becoming ever more fragmented

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000 World – Connected device installed base (m)

Other connected devices FTA set-top boxes BD players Smart TVs DMAs Pay-TV set-top boxes Game Consoles Tablets PCs Smartphones

IAB Italy Forum | 9 Source: IHS

§  Increased regulatory attention on our sector §  Privacy & data protection: GDPR, data transfer, amended ePrivacy Directive (“cookie

Directive), OBA Self-regulatory Framework §  Intellectual property: trade mark review, copyright review §  Consumer protection: UCPD §  Telecom rules / net neutrality

§  European legislative process is a 2-track process where European Parliament and Council / Member States are “co-legislators” – both national- and EU-level tracks are essential for impact

§  IAB Europe works to explain bottom-line impact of new rules on innovation & competitiveness in Europe

§  Digital is top of the agenda – 13 “Digital Commissioners”! §  ‘DISE’ network supported by national IABs will bring business reality

to EU decision-makers

How IAB Europe’s policy engagement contributes to continued growth

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Substantive policy priorities are still to do with privacy & data protection; new focus on intellectual property §  Privacy & data protection :

§  Proposed general data protection regulation; §  Data transfer / Safe Harbour; §  Implementation and case law around the amended e-Privacy Directive 2009/136/

EC; §  OBA Self-regulatory Framework §  Ad blockers & Do Not Track

§  Intellectual property: trademark review, copyright review §  Other dossiers – telecom rules, consumer protection, ad blockers

How IAB Europe’s policy engagement contributes to continued growth

IAB Italy Forum | 11

How IAB Europe’s policy engagement contributes to continued growth

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Proposed general data protection regulation: key changes in comparison with 95/46/EC

§  Scope/jurisdiction (affects non-EU companies) §  RTBF §  Breach notification (eCommerce Directive) §  Consent (affirmative action) §  Enforcement – 5% of global turnover for breaches §  Data protection officer mandatory for companies over 250 employees

& “risky processing” §  DPA competence / one-stop-shop §  EDPB with increased autonomy & authority §  Ex ante notifications / prior approval removed (exceptions)

How IAB Europe’s policy engagement contributes to continued growth

IAB Italy Forum | 13

Proposed general data protection regulation: §  EP first reading made minor improvements but kept general shape

of Commission text §  Council made slow progress until Italian Presidency; current focus

is one-stop-shop, and public sector (in-scope / out-of-scope) §  IAB Europe priority issues: consent, legitimate interest,

pseudonymous data, profiling §  Key industry allies = ICDP (esp. WFA, EACA, FEDMA) §  Next steps / timing §  Call to action for IAB Italy, other IABs §  New rules would come into force mid-2017 at the earliest

How IAB Europe’s policy engagement contributes to continued growth

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Ongoing enforcement, possible amendment of the ePrivacy Directive 2009/36/EC (“cookie Directive”): §  Lack of harmonisation across the EU (see IAB online documentation

centre for rules in your Member State) §  Some worrying national case law §  Commission has said will amend Directive but outcome linked to final

GDPR wording on consent

How IAB Europe’s policy engagement contributes to continued growth

Data Transfer / Safe Harbour §  Current applicable law is 95/46/EC §  US does not meet “adequacy” test, but Safe Harbour regime in place

since 2000 §  Post-Snowden revelations, pressure on EU Commission to re-

negotiate or drop Safe Harbour §  Talks with US on modernisation scheduled to be completed this

autumn / winter §  IAB Europe supports a level playing field and effective enforcement

of Safe Harbour

How IAB Europe’s policy engagement contributes to continued growth

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IAB Europe OBA Self-regulatory Framework §  Framework implemented since end 2012 §  Enforcement by national SROs, certification providers §  Third parties implement §  Steps are licencing the icon, technical implementation and link to Your

Online Choices site, internal self-certification of compliance, external audit of self-certification, award of B2B business seal of compliance

§  Extension to mobile currently discussed with EDAA stakeholders on the basis of an IAB Europe draft addendum to the existing Framework

§  Current dialogue with European Commission on future role of / scope for Self-regulation

How IAB Europe’s policy engagement contributes to continued growth

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Ad blockers, Do Not Track §  Survey of national IABs in September found ad blockers may deprive websites of

up to 80% of ads, depending on type of site and audience demographic §  Most respondents said replying tit-for-tat would be unproductive in the long term §  Policy issue or a business issue? Some competition policy aspects (e.g. whitelisting

against payment) §  IAB Europe working with EU publisher organisations to explore way forward §  Do Not Track – link to OBA Framework for DG CNECT

How IAB Europe’s policy engagement contributes to continued growth

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Trademark reform §  Trilogue discussions underway – ‘informal’ trilogue completed,

Council will review state of play on 14th November §  IAB Europe focusing on ‘referential use’

Copyright reform §  Barroso Commissions put off opening up the 2001 Copyright

Directive, despite support from Kroes for new rules to support digital innovation

§  Juncker Commission has put it on the agenda, but unclear how Commission VPs with ‘team’ responsibilities will articulate with individual Commissioners

Thank you for your attentionwww.iabeurope.eu feehan@iabeurope.eu

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