[PPT] - AdEx Benchmark 2014 About the study A meta analysis of online ad PowerPoint Presentation

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IA IAB B Europe AdEx Benchmark 2014

SLIDE 2

About the study

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A meta analysis of online ad spend in Europe

RATECARD Campaigns x Ratecard GROSS Revenue Billed NET Revenue Billed No Agency commissions

SLIDE 4

Submissions from 27 European countries

Austria
Belarus*
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

*New participant from 2014

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Big Picture and Context

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The value of European online advertising in 2014

€30.7bn

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2014: Eurozone macro-recovery provides foundation for ad growth

8
6
4
2

2 4 6 2004-Q1 2004-Q3 2005-Q1 2005-Q3 2006-Q1 2006-Q3 2007-Q1 2007-Q3 2008-Q1 2008-Q3 2009-Q1 2009-Q3 2010-Q1 2010-Q3 2011-Q1 2011-Q3 2012-Q1 2012-Q3 2013-Q1 2013-Q3 2014-Q1 2014-Q3 2015-Q1

GDP growth in Eurozone (%)

Eurozone France Italy Germany

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Double-digit online advertising growth in 2014

27.4 30.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2013 2014

Total online advertising spend (€bn)

11.6% like-for-like

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Online advertising spend has doubled in the last five years…

* Source: IAB Europe for 2011-2014; 2006- 2011 retropolated based on IHS growth rates

6.6 9.2 14.5 15.8 18.8 21.9 24.4 27.4 30.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total online advertising spend (€bn)*

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…while maintaining double-digit growth for five consecutive years

19.0% 16.5% 11.5% 11.9% 11.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2010 2011 2012 2013 2014

Online advertising year-on-year growth (%)

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Online growth rescued overall European advertising market in 2014

0.0%

9.5%
1.6%

11.4% 13.8% 11.7% 3.0%

5.0%

1.8%

15.0%
10.0%
5.0%

0.0% 5.0% 10.0% 15.0% 20.0% WE CEE Total Europe

2014: advertising year-on-year growth (%)

Total excluding online Online Total

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In Western Europe, online advertising spend per head for the first time exceeded spend on all other media in 2014

58.7 22.2 43.6 59.9 11.3 39.8

10.0

20.0 30.0 40.0 50.0 60.0 70.0 WE CEE Total Europe

Ad spend per capita in 2014 (€)

TV Print Online Other

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Strong growth puts size of online ad market nearly on par with TV

0.7 5.2 7.8 26.8 30.7 33.5

5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 Cinema Radio OOH Print Online TV

Ad spend by category in Europe in 2014 (€bn)

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Markets

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Over half of all European online ad spend comes from three markets; contribution by top 10 to total market stable

57.3% 69.4% 77.9% 86.6% 56.9% 69.9% 78.2% 86.4% 58.8% 70.8% 78.8% 86.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Top 3 Top 5 Top 7 Top 10

Share of European online ad revenue by market (%)

2012 2013 2014

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Top 10 European online advertising markets at a glance

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

Total online ad spend (€m)

2013 2014

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All European markets recorded positive growth in online advertising in 2014…

43.1% 33.3% 32.8% 20.8% 19.5% 18.7% 17.3% 16.3% 16.0% 16.0% 14.7% 14.3% 13.8% 13.3% 12.7% 12.0% 11.6% 11.4% 11.2% 10.8% 9.5% 9.3% 8.4% 7.8% 7.7% 6.6% 2.3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Slovenia Ireland Belarus Turkey Hungary Bulgaria Russia Greece Austria Belgium Slovakia UK Switzerland Sweden Finland Italy Europe Netherlands Denmark Croatia Serbia Germany Norway Poland Czech France Romania

Online ad growth like-for-like in 2014 (%)

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…and 20 markets grew double-digit

Belgium Bulgaria Croatia Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Netherlands Norway Poland Romania Russia Slovakia Austria Belarus Sweden Switzerland Turkey UK

10%
5%

0% 5% 10% 15% 20% 25% 30% 35% 40%

20

40 60 80 100 120 140

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Growth drivers

Social media Video Programmatic transactions and data infrastructures Improved data literacy on both demand and supply side Mobile internet penetration increasing across all of Europe Measurement initiatives in mobile and video taking effect

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Growth hurdles

Viewability and fraud Some cannibalization of desktop budgets by mobile CPM/CPC inflation Limited inventory in video Attribution Measurement issues remain despite improvements

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Formats

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Display drove online advertising growth in 2014

9.1% 6.3% 15.5% 11.5% 14.9% 3.6% 13.0% 11.9% 15.2% 5.8% 10.8% 11.6%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Display Classifieds & Directories Paid-for-search Total

Year-on-year growth (%)

2012 2013 2014

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Display grew its share, eating into both Paid-for-search and Classifieds & Directories

47.5% 48.2% 43.8% 32.2% 31.0% 32.7% 32.4% 33.8% 35.6% 18.3% 14.9% 18.9% 19.8% 20.7% 19.6% 18.5% 16.8% 15.9% 34.1% 36.6% 36.6% 47.3% 48.0% 47.1% 48.8% 49.2% 48.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2007 2008 2009 2010 2011 2012 2013 2014

Format shares of online (%)

Display Classifieds & Directories Paid-for-search Other

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35.1% 34.1% 29.4% 26.4% 23.4% 23.3% 22.5% 18.6% 17.4% 16.2% 15.8% 15.5% 15.2% 14.5% 13.4% 12.9% 12.1% 11.5% 10.4% 10.2% 9.1% 8.3% 7.3% 4.5% 1.2%

3.1%
5.0%
10%
5%

0% 5% 10% 15% 20% 25% 30% 35% 40% Ireland Slovenia Turkey UK Sweden Austria Belarus Finland Italy Belgium Bulgaria Hungary Europe Norway Denmark France Netherlands Slovakia Switzerland Greece Germany Serbia Poland Czech Republic Romania Croatia Russia

Display advertising growth year-on-year (%)

Display showed uneven growth with a 40 percentage point range across markets

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Video is now an integral part of online display advertising

30.6% 26.8% 25.3% 23.3% 22.3% 18.0% 17.7% 17.2% 16.4% 16.1% 15.6% 15.1% 14.6% 13.7% 13.6% 12.7% 11.7% 11.4% 11.2% 8.7% 7.0% 5.8% 5.4% 3.9% 3.0% 0% 5% 10% 15% 20% 25% 30% 35% Slovenia Switzerland Russia Belgium Bulgaria UK Greece Sweden Netherlands Poland France Europe Ireland Norway Germany Croatia Turkey Austria Italy Finland Czech Republic Hungary Denmark Romania Belarus

Video share of Display (%)

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Video growth is at least double-digit in all markets

187.5% 143.5% 115.3% 100.0% 62.5% 60.1% 59.0% 57.9% 56.2% 53.7% 48.1% 42.1% 42.1% 40.0% 35.8% 30.4% 30.1% 28.8% 28.2% 27.9% 24.2% 22.2% 17.5% 17.0% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% Greece Hungary Austria Belarus Ireland Denmark Sweden Switzerland Romania Norway Turkey UK Russia Slovenia Europe Netherlands Bulgaria France Poland Germany Czech Republic Finland Italy Belgium

Video growth year-on-year in 2014 (%)

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Mobile consolidates its position as key driver of display advertising

33.8% 24.5% 21.7% 17.7% 17.7% 15.4% 15.2% 14.6% 12.9% 11.1% 10.0% 9.0% 7.8% 6.5% 6.4% 5.4% 5.4% 5.1% 3.4% 2.1% 1.6% 1.3% 1.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% UK Ireland Norway Europe Italy Netherlands Russia France Sweden Hungary Austria Finland Germany Denmark Poland Serbia Croatia Slovenia Turkey Czech Republic Belarus Bulgaria Romania

Mobile display as a share of total Display (%)

2012 2013 2014

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35.1% 34.1% 29.4% 26.4% 23.4% 23.3% 22.5% 18.6% 17.4% 15.8% 15.5% 14.5% 13.4% 12.9% 12.1% 9.1% 8.3% 7.3% 4.5% 1.2%

3.1%
5.0%
10%
5%

0% 5% 10% 15% 20% 25% 30% 35% 40% Ireland Slovenia Turkey UK Sweden Austria Belarus Finland Italy Bulgaria Hungary Norway Denmark France Netherlands Germany Serbia Poland Czech Republic Romania Croatia Russia

Display year-on-year growth (%)

Display

This is more evident…

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20%
10%

0% 10% 20% 30% 40% Ireland Slovenia Turkey UK Sweden Austria Belarus Finland Italy Bulgaria Hungary Norway Denmark France Netherlands Germany Serbia Poland Czech Republic Romania Croatia Russia

Display year-on-year growth (%)

Display Display excluding Mobile

…when we remove Mobile from Display

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Mobile was responsible for 50% of market growth

European Display with mobile: +15.2% European Display without mobile: +7.9%

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Classifieds & Directories struggled in 2014 with 11 countries experiencing decline

65.0% 50.0% 44.7% 32.5% 20.1% 20.1% 20.0% 12.5% 11.6% 10.7% 10.0% 7.9% 6.5% 5.8% 5.5% 5.3% 3.0% 2.5% 0.0% 0.0% 0.0%

1.2%
3.6%
6.1%
7.2%
16.6%
51.6%
60%
40%
20%

0% 20% 40% 60% 80% Croatia Belarus Bulgaria Hungary Serbia Slovakia Slovenia Switzerland UK Germany Belgium Netherlands Turkey Europe Denmark Austria France Poland Finland Greece Russia Czech Republic Ireland Norway Sweden Italy Romania

Classifieds & Directories year-on-year growth in 2014

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Deceleration of Search in mature markets dampens overall growth

42.7% 29.2% 26.9% 25.8% 23.1% 19.5% 19.0% 18.6% 16.7% 15.8% 15.8% 15.0% 14.0% 13.9% 12.2% 12.2% 11.9% 10.8% 10.5% 10.1% 9.0% 9.0% 8.7% 4.4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Ireland Belgium Russia Bulgaria Greece Norway Hungary Sweden Switzerland Czech Republic Slovakia Croatia Austria Italy Turkey Denmark Netherlands Europe Poland Serbia Germany Finland UK France

Paid-for-search year-on-year growth in 2014 (%)

2013 2014

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40.1% 26.5% 22.2% 19.1% 18.3% 17.4% 15.1% 14.3% 12.5% 6.0% 5.5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Mobile share of Paid-for-search in 2014

Notable part of paid-for search is now mobile

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Media advertising revenue in Europe

TV Radio Newpapers Magazines OOH Cinema Online

First market signals from IABs confirm outlook that online will command the highest share of all media ad spend in 2015

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Th Thank you

daniel iel.knapp@ihs.com ele eleni.marouli li@ih ihs.com