IAB Report on Online Advertising S ??DRAFT July 2015 IAB Report on Online Advertising Spend The Netherlands Q1 2015

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  • DRAFT

    July 2015

    IAB Report on Online Advertising Spend

    The Netherlands Q1 2015

  • 2015 Deloitte The Netherlands

    Introduction

    IAB report on Online Ad Spend The Netherlands Q1 20152

    Since 2010, IAB and Deloitte are publishing the Online Ad Spend Report for the Netherlands. The content of this report is driven by data and information gathered directly from the online community, including publishers, advertisers and media planners. Due to a great number of participating key industry players we are able to gain extensive insight in the online advertising market.

    Collection

    Aggregation

    Conversation

    Validation

    Deloitte collects data covering the majority of the market

    Participants data is processed based on desk research and expert opinions

    Initial findings are verified with industry experts and media buyers

    Findings are cross-referenced and validated with selected respondents

    PublicationFinal findings are presented to the IAB and industry participants

    Realization of this study:

    Survey methodology

    Our current report covers the total net online advertising spend in the Netherlands during Q1 2015 and is based on information supplied by 33 participating companies.

    Figures are adjusted for double counting, based on

    information provided by the survey participants

    The figures are drawn up on the basis of company input

    and have not been verified by Deloitte

    Only aggregated results are published, individual

    company information is held in strict confidence with

    Deloitte

    2015 Deloitte The Netherlands

  • 2015 Deloitte The Netherlands

    Executive summary

    Online advertising spend the Netherlands Q1 2015

    IAB report on Online Ad Spend The Netherlands Q1 20153

    Spend on online advertising increased with +8,9% in revenues during Q1 2015, mainly due to good performance of classifieds, directories and listings (+12,1%) and display advertising (+9,7%). Within the Netherlands the net spend on online advertising currently totals 377m for the 1st quarter of 2015.

    Advertising spend on Social platforms (e.g. advertising on Facebook, Twitter or LinkedIn) grows with an estimated +43% during Q1 2015 to 28m in revenues. In 2014 95m was the estimated spend on advertising on Social platforms.

    24% of display advertising is spent on mobile devices and showed an increase of +49% in revenues in respect to the first quarter of last year. Mobile devices are currently the only source of revenue growth within display advertising, while spend on desktop/laptop devices stagnates.

    Spend on display advertising through programmatic channels gains more traction and increased with 40% in Q1 2015. Main contributors are the shift of Interruptive (e.g. rich media) and the overall increase of inventory towards the exchange (from both settled and recently joined publishers).

    Since 2013 spend on Online Video advertising is growing steadily and realized +26% in revenues during Q1 2015. Online video accounts for 15% of the overall display advertising spend and shows a traditionally low (but increasing) share during the start of the year.

    +8,9%

    +49%

    +43%

    +40%

    +26%

    Online ad spend

    Mobile

    Social

    Programmatic

    Online Video

  • 2015 Deloitte The Netherlands

    Online advertising market

    Revenue spend on online advertising has grown with +8,9% in Q1 2015 in respect to the same period of previous year. Publishers indicate less growth than the double digits achieved in 2014, mainly due to stabilization of the market after the economic recession that ended fall 2013.

    Classifieds, directories and listings

    The best performing category in online advertising in Q1 2015 is classifieds, directories and listing. Revenues in this category increased with +12,1%. The main drivers behind this growth are the strong development of e-commerce (products and services) and the increased number of open vacancies.

    Display advertising

    Online advertising through display advertising increased with +9,7%. The main drivers in the display market are video and social through in-app and mobile advertising as the budget spent by advertisers is following consumer time spend in these segments.

    Paid search advertising

    We estimate that spend on search engine advertising increased with +6,8% in Q1 2015. The majority of the revenue is generated by Google. However the search engine competitors of Google are starting to monetize more per usage share as buyers want to diversify and are willing to invest in more than one search engine.

    Online advertising quarterly spend

    Revenue per online advertising category

    IAB report on Online Ad Spend The Netherlands Q1 20154

    Note: The Internet figures we report are net/net figures, meaning that the figures are reported after agency discount that in some cases may apply; Search and classifieds, directories & listings are based on a limited number of data points; Growth rate and/or additions may not equal presented numbers due to rounding;

    Source: Annual reports, Survey respondents, Deloitte analysis

    133 127 136148 148 146 149

    166 158

    123 130 115

    152 140 151 124

    167153

    54 5041

    46 58 55

    44

    4965310 307

    291

    347 346 352

    317

    382 377

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

    2013 2014 2015

    Online quarterly market (m)

    Y/Y Revenue Growth

    2014 Q1 2015

    Classifieds +8% +12,1%

    Display +13% +9,7%

    Search +11% +6,8%

    +8,9%

    2015 Deloitte The Netherlands

  • 2015 Deloitte The Netherlands

    Display advertising spend

    Trending topics

    IAB report on Online Ad Spend The Netherlands Q1 20155

    Source: IAB UK/US, Survey respondents, Deloitte analysis

    Advertising on social websites (m) / Y/Y advertising spend growth (%)

    Online video advertising (m) / Y/Y advertising spend growth (%)

    1214 15

    2220

    22 23

    30 28

    18%24%

    36%

    62% 62% 60%50%

    37%43%

    0

    5

    10

    15

    20

    25

    30

    35

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

    2013 2014 2015

    0%10%20%30%40%50%60%70%80%90%100%110%

    1315

    17

    24

    1820 21

    31

    23

    17% 22%

    48%36% 39% 32%

    23%29% 26%

    0

    5

    10

    15

    20

    25

    30

    35

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

    2013 2014 2015

    0%

    20%

    40%

    60%

    80%

    100%

    Social

    Video

    Trending in online display advertising

    One of the trending topics in online advertising for several years is the spend on social and the spend on online video due to the large reported revenue growth in annual reports of market players active in this segment. This year we will start to report our estimation on social spend. Our Social estimations are similar to our Google revenue spend estimate, largely based on media buyers data combined with publicly available information.

    Online video

    Advertising spend on online video increased with +26% in respect to the same period last year. First quarter spending is traditionally low and totals 23m in spend on pre- /mid-/ post rolls during Q1 2015.

    Social

    We estimate that ad spend on social platforms (incl. Facebook, Twitter, LinkedIn) reached 28m in Q1 2015, a market share of 19% of the display advertising spend. The realized share in the Netherlands is little behind UK/US markets where social (mainly Facebook) approximates 24% of the total display spend. Looking back, we estimate that the total social ad spend realized 95m during 2014 in the Netherlands, a 16% market share within online display advertising.

    2015 Deloitte The Netherlands

  • 2015 Deloitte The Netherlands

    Trend of spend per format

    Share of display advertising revenue per format %

    IAB report on Online Ad Spend The Netherlands Q1 20156

    Note: Text links and other formats are consolidated in this figure.

    Source: Survey respondents, Deloitte analysis

    Y/Y Revenue Growth

    2014 Q1 2015

    Text links/ Other

    +3% -3,2%

    Video +30% +26%

    Interruptive +1% -9%

    Embedded +13% +15%57% 56%53%

    49%

    57% 57%53%

    49%

    59%

    14% 15%15%

    17%

    13% 14%13%

    16%

    10%

    11% 12% 15% 16%13% 13% 17%

    18%15%

    19% 18% 18% 18% 17% 16% 16% 17% 16%

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

    2013 2014 2015

    Allocation of display revenue per format

    Online display advertising formats

    Within display we measure 4 distinct formats (video, embedded, interruptive and text links)

    Online video

    Online video grows with +26%, and is from last year onwards the fastest growing format in terms of ad spend.

    Embedded formats

    Embedded (e.g. banners) is the most mature format within display. Lifting on the increased consumption of content via mobile devices, the advertising spend on embedded formats increased with +15% in revenue, a stable growth in respect to the +13% result of 2014.

    Interruptive formats

    The advertising spend on interruptive formats (incl. rich media, over the page and page takeover) declined with -9%. Interruptive shows a strong negative trend in performance when compared to 2013 when it was the strongest performing format. This could be the effect of large migration of interruptive formats towards the exchange, where overall prices are lower especially during low demand seasons.

    Text links/ Other formats

    Text links/ other formats is a combination of text links and promoted- / branded content and shows similar advertising spend as in 2014. Unlike the interruptive formats,