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European online
advertising expenditure
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. 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. 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. 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. 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. 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. 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. 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 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. 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. 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. 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. 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. 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. 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. 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. 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. 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