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PwC
IAB internet advertising revenue report
2015 full year results
www.pwc.com
www.iab.net
Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP its subsidiaries or affiliates.
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Agenda
2
April 2016
Survey methodology
2015 full year results
Full year and quarterly trends
Advertising formats
Social media
Pricing models
Industry category spending
Historical advertising growth of media
About PwC
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Survey Methodology
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April 2016
Survey Scope
The IAB Internet Advertising Revenue Report is part of an ongoing IAB mission to provide an accurate barometer of Internet advertising growth.
To achieve differentiation from existing estimates and accomplish industry-wide acceptance, key aspects of the survey include:
• Obtaining historical data directly from companies generating Internet/online/mobile advertising revenues;
• Making the survey as inclusive as possible, encompassing all forms of internet/online advertising, including websites, consumer online services, ad networks, mobile devices and e-mail providers; and
• Ensuring and maintaining a confidential process, only releasing aggregate data.
Methodology
Throughout the reporting process, PwC:
• Compiles a database of industry participants selling internet/online and mobile advertising revenues.
• Conducts a quantitative mailing survey with leading industry players, including web publishers, ad networks, commercial online service providers, mobile providers, e-mail providers and other online media companies.
• Acquires supplemental data through the use of publicly disclosed information.
• Requests and compiles several specific data items, including monthly gross commissionable advertising revenue by industry category and transaction.
• Identifies non-participating companies and applies a conservative revenue estimate based on available public sources.
• Analyzes the findings, identifies and reports key trends.
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Annual revenues totaled…
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April 2016
In b
illi
on
s $49.5
$60.0
FY 2014 FY 2015Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Annual revenues totaled $59.6 billion in 2015
Online advertising revenue increased 20.4% in 2015
In b
illi
on
s $49.5
$59.6
FY 2014 FY 2015
20.4%
Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Fourth quarter revenues totaled…In
bil
lio
ns $14.2
$17.4
Q4 2014 Q4 2015Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Fourth quarter revenues totaled $17.4 billion in 2015
Revenue in Q4 2015 was $3.2 billion higher than in Q4 2014
In b
illi
on
s $14.2
$17.4
Q4 2014 Q4 2015
22.8%
Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Strong growth between Q3 2015 and Q4 2015
In b
illi
on
s
$14.7
$17.4
Q3 2015 Q4 2015Source: IAB Internet Advertising Revenue Report, FY 2015
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Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Strong growth between Q3 2015 and Q4 2015
In b
illi
on
s
$14.7
$17.4
Q3 2015 Q4 2015
18.3%Revenue in Q4 2015 was $2.7 billion higher than in Q3 2015
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Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Quarterly growth continues upward trendQuarterly growth comparison, 1996–2015
In b
illi
on
s
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April 2016
2015 showed record revenuesAnnual revenue 2005-2015
In b
illi
on
s
12.5
16.9
21.223.4 22.7
26.0
31.736.6
42.8
49.5
59.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total Internet
Source: IAB Internet Advertising Revenue Report, FY 2015* CAGR: Compound Annual Growth Rate
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2015 showed record revenuesAnnual revenue 2005-2015
In b
illi
on
s
12.5 16.9
21.2 23.4 22.7 25.4
30.1 33.2 35.7 37.0 38.9
0.6
1.6
3.4
7.1
12.5
20.7
12.5
16.9
21.223.4 22.7
26.0
31.736.6
42.8
49.5
59.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mobile
Non-Mobile
100%MobileCAGR
9%Non-mobileCAGR
Source: IAB Internet Advertising Revenue Report, FY 2015* CAGR: Compound Annual Growth Rate
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$20.5
$2.8$1.8
$20.7
$4.2
$7.7
$0.6$1.3
8%
2%
-6%
66%
30%
-4%
-16%-11%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$-
$5
$10
$15
$20
$25
Search Classifieds &Directories
Lead Generation Mobile Digital VideoCommercials
Banners Ads Sponsorship Rich Media
2015 Revenue 2015 vs. 2014 % Growth
Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Mobile showed the strongest YoY growthAdvertising formats – 2015 results and growth rates
In b
illi
on
s
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Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Historical trends in internet advertising formatsRevenue share by major ad formats, 2006–2015
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Search Mobile Banner Classifieds Digital Video LeadGeneration
Rich Media
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% o
f to
tal
re
ve
nu
e
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Distributing Mobile across formats demonstrates its importance to Search and Display
34%
23%
8%
35%
Search Display Other Mobile
Formats –2015(Mobile separated)
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April 2016Source: IAB Internet Advertising Revenue Report, FY 2015
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34%
23%
8%
35%
Search Display Other Mobile
49%
42%
9%
Search Display Other
Distributing Mobile across formats demonstrates its importance to Search and Display
Formats –2015(Mobile separated)
Formats –2015(Mobile included)
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April 2016Source: IAB Internet Advertising Revenue Report, FY 2015
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Social media demonstrated continued growthSocial media ad revenues, 2012 –2015
Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
In b
illi
on
s
* CAGR: Compound Annual Growth Rate
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33%
66%
1%
2014
Impression-based Performance-based
Hybrid
Total – $49.5 billion Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Hybrid-based pricing showed slight uptickInternet ad revenues by pricing model, 2014 vs. 2015
Total – $59.6 billion
33%
65%
2%
2015
Impression-based Performance-based
Hybrid
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Historical pricing model trendsInternet ad revenues by pricing model, 2005–2015
46% 48%
45%
39%37%
33%31% 32% 33% 33% 33%
41%
47%
51%
57%59%
62%65% 66% 65% 66% 65%
13%
5% 4% 4% 4% 5% 4%2% 2% 1% 2%
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CPM Performance Hybrid
% o
f to
tal
re
ve
nu
e
Note: Pricing model definitions may have changed over the time period depicted both within the survey process and as interpreted by respondents
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April 2016
Source: IAB Internet Advertising Revenue Report, FY 2015
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4%5%5%
7%6%
9%9%
13%13%
22%
4%5%5%
7%6%
9%9%
12%13%
21%
EntertainmentPharma &Healthcare
MediaConsumerElectronics &
Computers
ConsumerPackaged
Goods
Leisure TravelTelecomAutoFinancialServices
Retail
FY 2015 FY 2014
Internet ad revenues by major industry category$49.5 B in 2014 vs. $59.6 B in 2015
% o
f to
tal
re
ve
nu
e †
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April 2016
† Amounts do not total to 100% as minor categories are not displayed.
Source: IAB Internet Advertising Revenue Report, FY 2015
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April 2016
Historical 20 year advertising revenue growth, by major broadcast media type
Ad
ve
rti
sin
g R
ev
en
ue
(in
mil
lio
ns
)
Sources: Douglas Galbi (purple motes) and IAB Internet Advertising Revenue Report, FY 2015
Growth rate has been adjusted for inflation
1926 - 1945
1949 - 1968
1980 - 1999
1996 - 2015
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Historical Media Growth – First 20 Years
Radio TV Cable Internet
PwCPwCOctober 9, 2013
PwC’s Technology and Entertainment, Media, and Communications practices
As business, accounting, and tax advisors to many of the world’s leading Entertainment, Media, and Communications (EMC) and Technology (Tech) companies, PwC (www.pwc.com) has an insider’s view of trends and developments driving the industry. With approximately 1,200 practitioners serving EMC and Tech clients in the United States, PwC is deeply committed to providing clients with industry experience and resources. In recent years, our pioneering work in EMC and Tech has included developing strategies to leverage digital technology, identifying new sources of financing, and marketplace positioning in industries characterized by consolidation and transformation. Our experience reaches across all geographies and segments of the EMC and Tech sectors, including broadband, wireless, the internet, music, film, television, publishing, advertising, gaming, theme parks, computers and networking, and software. With thousands of practitioners around the world, we're always close at hand to provide deep industry knowledge and resources.
Our services include:
• Business assurance services
• Web audience measurement and advertising delivery auditing and advisory
• IAB Measurement Certification Compliance auditing
• Privacy policy structuring, attestation, and compliance advisory
• Mergers & acquisitions assistance
• Tax planning and compliance
• Capital sourcing and IPO assistance
• Marketing & Media operations enablement
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April 2016
PwCPwCOctober 2015
For information, contact one of the following PwC professionals:New York
David SilvermanPartner, Assurance [email protected]
Russ SapienzaPartner, Advisory [email protected]
Brian GaffneyManager, Advisory [email protected]
23
Technology and Entertainment, Media, and Communications practicesContacts
April 2016
PwC
www.pwc.com/e&m
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