AdEx 2008
       European online
advertising expenditure
contents




           Introduction                                               3
           About this report         ...
introduction


2008 was a challenging year for the advertising            overall as well as insight into emerging formats...
about this report



The sources of the online advertising spend data            IAB Europe in partnership with
contained ...
executive summary



European online advertising continued to grow in                     online advertising spend. Whilst...
Europe and the US



Between 2007 and 2008 the total US online advertising spend grew by 11%. This is comparable to Europe...
19 European markets in perspective



Once again, in 2008 the largest online advertising                           When it...
19 European markets in perspective



Putting those figures into perspective – how does               Sweden and the Nethe...
Europe retrospective



As the two charts below show, the online advertising market has grown consistently from 2006 to 20...
“10 before 10”




                                                                        “
In June 2008, Alain Heureux, ...
European online advertising spend grew by 20% in 2008



Between 2006 and 2007 European online advertising                ...
search top of the formats in 2008



Search remains the leading format in Europe with the
strongest year-on-year growth ra...
search


G
G
G
G
    Value €5.6 billion
    Accounts for 43% of overall online spend
    Total European like-for-like grow...
search



                                                      Search value by Country 2006-2008 million euros
          ...
classifieds


G   Value €3.3 billion                                                                               making ...
classifieds



                                                       Classifieds value by Country 2006-2008 million euros...
display


G   Value €3.8 billion
G   Accounts for 29% of overall online spend
G   Total European like-for-like growth 15%
...
display



                                                                        Display value by country 2006-2008
    ...
email



G   Value €0.2 billion
G   Accounts for 2% of overall online spend
G   Total European like-for-like growth 1.6%
G...
Iab Europe Ad Ex 2008
Iab Europe Ad Ex 2008
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Iab Europe Ad Ex 2008
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Iab Europe Ad Ex 2008
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Iab Europe Ad Ex 2008
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Iab Europe Ad Ex 2008

  1. 1. AdEx 2008 European online advertising expenditure
  2. 2. contents Introduction 3 About this report 4 Executive summary 5 Europe and the US 6 19 European markets in perspective 7 Europe retrospective 9 “10 before 10” 10 European online advertising in 2008 11 Search top of the formats in 2008 12 Search 13 Classifieds 15 Display 17 Email 19 Regional and country detail Western Europe 21 Central and Eastern Europe 24 Forecasting the European advertising market in 2009-2010 26 Emerging digital formats 28 Online TV advertising 29 Mobile advertising 30 In-game advertising 31 Top 10 properties December 2008 32 Top 10 ad publisher sites by ad impressions 34 Internet penetration in Europe 36 Appendix i – Definition of formats 38 Appendix ii – Participating IABs 39 Appendix iii – Methodology and adjusted data 40 Appendix iv – Estimates and adjustments 41 Appendix v – Our research partners 42 About IAB Europe 43
  3. 3. introduction 2008 was a challenging year for the advertising overall as well as insight into emerging formats that industry in many of the 19 countries covered in this will make an impact on our market in the near future report. Yet despite the global economic downturn, our including video, mobile and in-game. Finally, dynamic and exciting industry still experienced a 20% comScore and The Nielsen Company have provided growth rate year-on-year – a significant achievement audience measurement data for 2008 – a vital and one of which we should all be proud. reference point for all our readers. The IAB Europe AdEx Report continues to be the We could not produce this report without the definitive guide to the European online advertising cooperation of the 19 national IABs that take part – I industry. We believe that it is vital for us, as the am indebted to you for your support of this industry interactive advertising trade body, to give the industry and the principles of IAB Europe. reliable, trusted data every year that provides a clear picture of the state of the market overall, by country I believe online advertising has a great opportunity in and by format. We take time to collate the data we today’s challenging economic times to prove its value offer from across the region, using our partners, as a truly effective advertising medium and more and PricewaterhouseCoopers, to help ensure that the look forward to seeing how we did when we publish figures we publish in June are comparable and the 2009 figures. accurate. Thanks to our rigorous methodology and quality controls, we now have three years of comparative data so readers can see where the industry has come from and how individual markets and formats have developed. There are also comparisons with the US. We have new information in this edition of the report that I am sure you will find invaluable. Firstly, we are delighted to have added three key markets to the countries already being measured - that is Croatia, Hungary and Romania. Secondly, our research partner Screen Digest has provided us with their view of the Alain Heureux IAB Europe President market, providing forecasts from their renowned and CEO media analysts of the online advertising industry 3
  4. 4. about this report The sources of the online advertising spend data IAB Europe in partnership with contained within this report are the annual industry PricewaterhouseCoopers (PwC) collates and benchmarking studies run by each national Interactive aggregates the data and makes the adjustments Advertising Bureau (IAB) in Europe. The national necessary to enable the data to be comparable. More benchmarking studies represent the income of details of this process are provided in the Appendix. thousands of websites and online advertising businesses. The result is comparable data based on actual revenues from across Europe. This is the third edition of the The results reported are considered the closest report and therefore once again we are able to include measurement of online advertising revenues across year-on-year comparisons in the report for those Europe as the data is compiled directly by local IABs, countries that have participated for at least two years. based on information supplied by companies selling advertising online. Only IABs that were able to provide PricewaterhouseCoopers does not audit the 12 full months of advertising expenditure data are information or the data from local IABs and provides included. no opinion or other form of assurance with respect to the information. Only aggregate results are published The data for this report is stated on the basis of actual and individual company information is held in strict gross income (the monies actually paid by the confidence with local IABs and their individual advertiser, including any agency commission). The arrangements with companies that submit data. report incorporated data from the following four online advertising sectors: IAB Europe July 2009 G Display advertising G Search (pay per click fees) G Classifieds G Email marketing 4
  5. 5. executive summary European online advertising continued to grow in online advertising spend. Whilst the mature markets felt 2008, despite the challenging economic climate that the impact of the economic climate, some of the markets began to be felt in Q3 but made more of an impact in in the CEE region experienced strong growth rates - the final quarter of the year on all advertising markets, Slovenia at 77% and Poland at 60%. These markets may be they traditional or digital. Total online advertising be smaller, but their growth rates made a significant spend for the countries under measurement in the IAB contribution to the overall European performance in Europe network reached €12.9 billion in the year. This 2008. The three new markets in the CEE region added represents a like-for-like growth of 20% on the 2007 this year – Croatia, Hungary and Romania will be figure of €10.6. The gap between Europe and the USA interesting to watch in the coming years. has continued to narrow, with the difference dropping from €4.4 billion in 2007 to €3.7 billion in 2008, Search remains the leading format in Europe with the reflecting Europe’s strong performance in difficult strongest year-on-year growth rate of 26%, accounting economic times. for 43% of online ad expenditure in the 19 countries measured and a value of €5.6bn. The report provides The top 10 markets in Europe account for 93% of the detailed analysis of what is happening in each of the total value of the market. The UK, Germany and France formats, along with forecasts based on the AdEx 2008 still dominate, accounting for 64% of the total European figures from our research partner Screen Digest. Total Online Advertising 2007 & 2008 Like for like growth of 20% 15 €12.9 12 €10.6 Billions Euros 9 6 3 0 2006 2007 Source: IAB Europe/PwC© 5
  6. 6. Europe and the US Between 2007 and 2008 the total US online advertising spend grew by 11%. This is comparable to Europe’s earliest adopter of online advertising, the Netherlands, which recorded a growth of 9% in the same period. All other European markets recorded a stronger growth rate than the US, although of course in absolute value terms the European online advertising market is still worth less than the US. Total Online Ad Spend Europe vs USA 2007 & 2008 20 Europe USA €16.6 €12.9 15 €15.0 €10.6 Billions Euros 10 5 0 2007 2008 Source: IAB Europe/PwC© 6
  7. 7. 19 European markets in perspective Once again, in 2008 the largest online advertising When it comes to share of spend, the three largest market in Europe is the UK, with a spend of just over markets dominate. The UK accounts for 27% of the 3.4 billion Euros. Germany and France are the only overall online advertising spend in Europe, followed by other markets with spends of over a billion Euros. Germany at 23% and France at 14%. The Netherlands (6%), Italy (6%) and Spain (5%) are the next largest Each of these three countries also enjoyed a healthy markets in terms of spend. like-for-like growth in Euro terms on last year’s online spend figures. Total by Country 2007 and 2008 €2,889 UK €3,441 €2,501 Germany €2,975 €1,537 France €1,821 €667 Italy €799 €729 Netherlands €794 €497 Spain €628 €372 Sweden €422 €340 Denmark €415 Norway €282 €345 Belgium €237 €286 Poland €158 €253 Austria €140 €202 Finland €133 €178 Turkey €98 €131 Hungary €82 Greece €31 €40 2007 Slovenia €11 €20 2008 Romania €19 Croatia €16 0 500 1000 1500 2000 2500 3000 3500 Millions Euros Source: IAB Europe/PwC© 7
  8. 8. 19 European markets in perspective Putting those figures into perspective – how does Sweden and the Netherlands devote just under one online shape up compared to overall ad spend? fifth of their main media advertising spend to online, Although the UK has the highest spend on internet whilst in other mature markets such as Italy and Spain advertising, it is Denmark that recorded the highest online advertising accounts for less than 10% of media proportion of overall advertising spend devoted to spend. online. Just under 23.6% of the main media advertising spend in Denmark was devoted to online advertising, with the UK next at 23.2%. Share of total spend by country million euros Spain €628, 5% Slovenia €20, 0% Romania €19, 0% Sweden €422, 3% Poland €253, 2% Turkey €131, 1% Norway €345, 3% Netherlands €794, 6% Italy €799, 6% UK €3,441, 27% Hungary €82, 1% Greece €40, 0% Germany €2,975 23% Austria €202, 2% Belguim €286, 2% Croatia €16, 0% Denmark €415, 3% Finland €178, 1% France €1,821, 14% Source: IAB Europe/PwC© 8
  9. 9. Europe retrospective As the two charts below show, the online advertising market has grown consistently from 2006 to 2008. We have adjusted the currencies in the chart Total by Country below to provide truly comparative data. Looking at the growth rates year-on-year in those markets where we have three complete years of data, the slowing of growth rates in 2008 in the mature markets becomes apparent, with Slovenia way out ahead and Austria second. Growth by Country 2006-2008 91% Greece 29% 60% Spain 26% 60% Denmark 22% 49% Slovenia 77% 46% Finland 34% 43% Germany 19% 41% Austria 45% 39% Italy 20% 35% UK 19% 30% France 18% 30% 2006 - 2007 Belgium 21% 2007 - 2008 29% Netherlands 9% 0 20 40 60 80 100 Growth % Source: IAB Europe/PwC© Total by Country 2006-2008 million euros (all data adjusted to 2008 exchange rates) €2,144 UK €2,889 €3,441 €1,752 Germany €2,501 €2,975 €1,179 France €1,537 €1,821 €564 Netherlands €729 €794 €480 Italy €667 €799 €311 Spain €497 €628 €213 Denmark €340 €415 €182.1 Belgium €237 €286 €99 Austria €140 €202 €91 Finland €133 2006 €178 €16 2007 Greece €31 €40 2008 €7 Slovenia €11 €20 0 500 1000 1500 2000 2500 3000 3500 Millions Euros Source: IAB Europe/PwC© 9
  10. 10. “10 before 10” “ In June 2008, Alain Heureux, President of IAB Europe predicted that we were well on the way to achieving a Large CPG companies are now studying to shift larger major online advertising milestone, where online amounts of money from TV to the web . This year I am advertising in 10 European countries would account talking with two of the leading global CPG companies for at least 10% of overall ad spend by 2010. Despite, who now own case studies that prove a better sales result or perhaps because of, the challenging advertising if you spent at least 20% of your TV (media) budget market in 2008, by the end of the year there were online instead of 100% on TV. I expect more budget from nine countries where this applied. In 2007 there were seven. The countries that qualify, however, had changed. In 2007 they were Denmark, Germany, the Netherlands, Norway, Poland, Sweden and the UK. A that sector beginning in 2009, growing in 2010. Marcel Udo| VP of Business Development, Managing Director Europe, ” EyeWonder Interactive Digital Advertising. Advance year later in 2008 Poland had dropped out of the list and France, Belgium and Finland had reached the magic 10% figure. Spend on online advertising as a percentage of main media spend by country 2008 Denmark 23.6% UK 23.2% Sweden 19.4% Netherlands 19.1% Germany 14.8% Norway 12.8% France 11.2% Belguim 10.4% Finland 10.0% Hungary 9.4% Italy 8.3% Spain 7.2% Austria 6.5% Poland 5.5% Greece 2.2% 0 5 10 15 20 25 % spend on online advertising Source: WARC© 10
  11. 11. European online advertising spend grew by 20% in 2008 Between 2006 and 2007 European online advertising online advertising, grew only 9% between 2007 and spend grew by 40%. Between 2007 and 2008 growth 2008, but managed a 29% growth between 2006 and was a more modest 20%. 2007. This growth rate is comparable to the 2007- 2008 growth of the US market, which sat at just under In 2008 some of the biggest markets for online 11% (10.7%). advertising experienced much lower growth rates than ever before. The UK online advertising market grew Other mature online markets saw similar lower growth, 40% from 2006-2007, but only managed 19% from with growth in France at 18%; the UK, Germany and 2007-2008. The Greek online advertising market grew Sweden at 19% and Italy at 20%. Just beating the 29% between 2007 and 2008 – considerably more 20% barrier, Belgium grew 21% and Denmark and modest than the 91% growth enjoyed between 2006 Norway hit a 22% growth rate. Spain by comparison and 2007. The Netherlands, Europe’s early adopter of saw relatively strong growth at 26%. Total growth by country from 2007 to 2008 80 77% 70 60% 60 50 45% Growth % 40 34% 33% 29% 30 26% 22% 22% 21% 20% 19% 19% 19% European 20 18% average 9% 10 0 a d ia d y ce ain ay k m ly UK y en ce ds ar ke an ni an lan Ita str iu lan ee an rw ed ve Sp nm r rm l lg Au Tu Po Fin Gr Fr No Sw er Slo Be De Ge th Ne Source: IAB Europe/PwC© 11
  12. 12. search top of the formats in 2008 Search remains the leading format in Europe with the strongest year-on-year growth rate of 26%, accounting for 43% of online ad expenditure in the 19 countries measured and a value of €5.6bn. “ The obsession with the last click (fuelled by the economic downturn) creates a digital advertising landscape that is dominated by the pursuit of direct response. If the pervasiveness and significance of the channel develops as Classifieds are next in terms of year-on-year growth we expect, it is our perspective that the online landscape rates at 17.4%, equating to a 26% share of ad spend should fall into three main areas for consideration: the and a market value of €3.8bn. exposure web, the transaction web and the social (reputation) web - this cannot be good for businesses The growth of search and classifieds can be partly that seek to create, nurture and profit from brands. It’s explained by measurement and performance-based time for a new approach that correlates online marketing needs – in times of recession advertisers are communications with the creation of social relevance and more focused on proving return on investment for ultimately sales, and for creative strategies that really every Euro spent and these two formats are the most accountable in online advertising. The focus on search and classifieds underlines just how important making online ad spend accountable is for the online engage and activate consumer interest and evangelism. Ruud Wanck, COO Interaction Europe, Middle East and Africa GroupM ” advertising industry to develop and grow. Share of formats 2008 Growth of formats 2007-2008 30 26% Search €5.6 bn Classifieds €3.3 bn 25 43% 26% 20 17% Growth % 15% 15 12% 10 Email €0.2 bn 2% Display €3.78 bn 5 29% Source: IAB Europe/PwC© 0 Search Classifieds Display Email Source: IAB Europe/PwC© 12
  13. 13. search G G G G Value €5.6 billion Accounts for 43% of overall online spend Total European like-for-like growth 26% Top five countries in terms of value: The UK, “2008 was yet another milestone for our industry. The genuine fear of a recession reversion to traditional models did not occur; in fact most brands actually increased their Germany, France, the Netherlands, Spain spend and focus on the internet. Furthermore brands are G Top five countries in terms of growth: Slovenia, deploying much more sophisticated digital marketing Norway, Austria, Poland, Finland programs that embrace not only paid digital media but G The Netherlands was the slowest growing market complement it with earned media on social networks and for search in 2008, with growth of only 9% - a renewed focus on organic search, both activities not considerably less than the second slowest growing search market, the UK, which recorded 23% growth. reflected in media research due to the lack of spend. Norm Johnston, Global Digital Leader, Mindshare ” Search value and growth 2500 Growth 2007-2008 80 2008 Value 70 2000 60 50 1500 Value Millions Euros Growth % 40 1000 30 20 500 10 0 0 ce y ly ain d k ds UK m en d ia y ey ce ay tia a ia ar an ni ar lan lan Ita str an iu lan an ee rw rk oa ed Sp ve nm ng rm lg Au m Tu Po Fin Gr Fr No Cr Sw er Slo Be Hu Ro De Ge th Ne Source: IAB Europe/PwC© 13
  14. 14. search Search value by Country 2006-2008 million euros (all data adjusted to 2008 exchange rates) €1,253 UK €1,663 €2,041 €765 Germany €1,071 €1,328 €364 France €410 €525 €288 Netherlands €366 €400 €145 Spain €238 €324 €135 Italy €205 €285 €49 Denmark €81 €116 €56 Belgium €73 €95 €36 Finland €58 €85 €25 Austria €37 2006 €60 €5 2007 Greece €10 €13 2008 €2 Slovenia €3 €6 0 500 1000 1500 2000 2500 Millions Euros Source: IAB Europe/PwC© Search growth by country 2006-2008 (all data adjusted to 2008 exchange rates) 68% Slovenia 72% 46% Austria 64% 63% Finland 45% 66% Denmark 44% 52% Italy 39% 64% Spain 36% 30% Belgium 30% 13% France 28% 100% Greece 28% 40% Germany 24% 33% 2006 - 2007 UK 23% 2007 - 2008 27% Netherlands 9% 0 20 40 60 80 100 Growth % Source: IAB Europe/PwC© 14
  15. 15. classifieds G Value €3.3 billion making choices on budget in favour of online. Yellow G Accounts for 26% of overall online spend pages are best positioned to provide the right mix of G Total European like-for-like growth 17% products that deliver superior ROI but they must G Top five countries in terms of value: France, UK, recognize the paradigm shift that online has created: Germany, the Netherlands, Italy consumers are no longer granted and need to be ‘hunted’. G Top five countries in terms of growth: Slovenia, Austria, Turkey, Poland, Norway With the advent of the internet, yellow pages have two G Once again the Netherlands was the slowest customers: advertisers, and users. Both are equally growing classifieds market, at just 5%, followed by important. Success comes by delivering value efficiently and Denmark and Belgium at 10%. through new products. We see this trend strengthening. It “ will represent an incredible opportunity for companies ” Online ad dynamics are drastically different to off-line that can transform themselves. yellow pages ones. SMEs are recognizing this and are Gianluca Carrera, Vice President, New Media, Truvo Classifieds value and growth 800 Growth 2007-2008 150 2008 Value 700 120 600 500 Value Millions Euros 90 Growth % 400 60 300 200 30 100 0 0 e y ly ain d k ds UK m en d ia y ey ce ay tia a ia ar an ni nc ar lan lan Ita str an iu lan ee rw rk oa ed Sp ve nm ng a m lg Au m Tu Po Fin Gr Fr No Cr Sw er Slo r Be Hu Ro De Ge th Ne Source: IAB Europe/PwC© 15
  16. 16. classifieds Classifieds value by Country 2006-2008 million euros (all data adjusted to 2008 exchange rates) €250 France €663 €776 €408 UK €601 €735 €371 Germany €560 €656 €120 Netherlands €163 €171 €130 Italy €150 €170 €95 Denmark €138 €152 €76 Belgium €98 €108 €53 Spain €77 €86 €21 Austria €31 €46 €23 Finland €29 2006 €36 €0 2007 Slovenia €0 €1 2008 €0 Greece €0 €0 0 100 200 300 400 500 600 700 800 Millions Euros Source: IAB Europe/PwC© Classifieds growth by country 2006-2008 (all data adjusted to 2008 exchange rates) 7% Slovenia 130% 49% Austria 48% 27% Finland 23% 48% UK 22% 165% France 17% 51% Germany 17% 15% Italy 13% 46% Spain 11% 44% Denmark 10% 30% Belgium 2006 - 2007 10% 2007 - 2008 37% Netherlands 5% 0 50 100 150 200 Growth % Source: IAB Europe/PwC© 16
  17. 17. display G Value €3.8 billion G Accounts for 29% of overall online spend G Total European like-for-like growth 15% G Top five countries in terms of value: Germany, UK, France, Italy, the Netherlands G Top five countries in terms of growth: Slovenia, Poland, Turkey, Austria, Greece G Norway (7%) and the UK (8%) were the slowest growing display markets in 2008. Display value and growth 1000 80 Growth 2007-2008 2008 Value 70 800 60 50 Value Millions Euros 600 Growth % 40 400 30 20 200 10 0 0 ce y ly ain d k ds UK m en d ia y ey ce ay tia a ia ar an ni ar lan lan Ita str an iu lan an ee rw rk oa ed Sp ve nm ng rm lg Au m Tu Po Fin Gr Fr No Cr Sw er Slo Be Hu Ro De Ge th Ne Source: IAB Europe/PwC© 17
  18. 18. display Display value by country 2006-2008 (all data adjusted to 2008 exchange rates) €588 Germany €837 €956 €465 UK €608 €655 €546 France €430 €482 €195 Italy €290 €323 €147 Netherlands €190 €210 €102 Spain €165 €196 €60 Denmark €107 €129 €52 Austria €69 €93 €46 Belgium €60 €77 €31 Finland €42 €54 2006 €11 2007 Greece €20 €26 2008 €5 Slovenia €7 €13 0 200 400 600 800 1000 Millions Euros Source: IAB Europe/PwC© Display growth by country 2006-2008 (all data adjusted to 2008 exchange rates) 47% Slovenia 76% 34% Austria 34% 82% Greece 29% 30% Belgium 28% 35% Finland 28% 78% Denmark 21% 62% Spain 19% 42% Germany 14% -21% France 12% 49% Italy 11% 29% 2006 - 2007 Netherlands 11% 2007 - 2008 31% UK 8% -40 -20 0 20 40 60 80 100 Growth % Source: IAB Europe/PwC© 18
  19. 19. email G Value €0.2 billion G Accounts for 2% of overall online spend G Total European like-for-like growth 1.6% G Top five countries in terms of value: France, Germany, Italy, Spain, Poland G Top five countries in terms of growth: Slovenia, Poland, Turkey, Greece, the Netherlands G UK (-37%), Norway (-35%) and Italy (-4.5%) all recorded negative growth in email advertising in 2008. Email value and growth 40 Growth 2007-2008 100 2008 Value 35 80 30 60 25 Growth % Value Millions Euros 40 20 20 15 0 10 -20 5 0 -40 e y ly ain d k ds UK m en d ia y ey ce ay tia a ia ar an ni nc ar la n lan Ita str an iu lan ee rw rk oa ed Sp ve m ng a rm lg Au m Tu Po Fin Gr Fr No Cr Sw n er Slo Be Hu Ro De Ge th Ne Source: IAB Europe/PwC© 19

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