Total European online ad spend breaks €30.7bn in 2014 +11.6% should overtake TV (33.5bn) in 2015!

1. IAB Europe AdEx Benchmark
2014
Daniel Knapp, IHS
Eleni Marouli, IHS

2. About the study

3. A meta analysis of online ad spend in Europe
RATECARD
Campaigns x
Ratecard
GROSS
Revenue Billed
NET
Revenue Billed
No Agency commissions

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

5. Big Picture and Context

6. The value of European online advertising in 2014
€30.7bn

7. 2014: Eurozone macro-recovery provides foundation for ad growth
-8
-6
-4
-2
0
2
4
62004-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

8. 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

9. 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)*

10. …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 (%)

11. 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

12. 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

13. 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)

14. Markets

15. 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

16. Top 10 European online advertising markets at a glance
0
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

17. 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 (%)

18. …and 20 markets grew double-digit
Belgium
Bulgaria
Croatia
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy Netherlands
NorwayPoland
Romania
Russia
Slovakia Austria
Belarus
SwedenSwitzerland
Turkey
UK
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
- 20 40 60 80 100 120 140

19. 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

20. 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

21. Formats

22. 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

23. 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

24. 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
CzechRepublic
Romania
Croatia
Russia
Display advertising growth year-on-year (%)
Display showed uneven growth with a 40 percentage point range
across markets

25. 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
CzechRepublic
Hungary
Denmark
Romania
Belarus
Video share of Display (%)

26. 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
CzechRepublic
Finland
Italy
Belgium
Video growth year-on-year in 2014 (%)

27. 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
CzechRepublic
Belarus
Bulgaria
Romania
Mobile display as a share of total Display (%)
2012 2013 2014

28. 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
CzechRepublic
Romania
Croatia
Russia
Display year-on-year growth (%)
Display
This is more evident…

29. -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
CzechRepublic
Romania
Croatia
Russia
Display year-on-year growth (%)
Display Display excluding Mobile
…when we remove Mobile from Display

30. Mobile was responsible for 50% of market growth
European
Display with
mobile: +15.2%
European
Display without
mobile: +7.9%

31. 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
CzechRepublic
Ireland
Norway
Sweden
Italy
Romania
Classifieds & Directories year-on-year growth in 2014

32. 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
CzechRepublic
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

33. 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

34. 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

35. Thank you
daniel.knapp@ihs.com
eleni.marouli@ihs.com