iab report on online advertising...

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



Executive summary

Online advertising spend the Netherlands Q1 2015


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


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


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

133 127 136 148 148 146 149 166 158

123 130 115

152 140 151124

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%



Display advertising spend

Trending topics


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.



Trend of spend per format

Share of display advertising revenue per format %


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, these formats are generally fully integrated within the look and feel of the publisher platform.



Online advertising spend per medium

Share of display advertising revenue per medium


Note: Mobile is ad revenue by impressions delivered to phone, tablet or in-app.

Source: Survey respondents, Deloitte analysis

Y/Y Revenue Growth

Q1 2015

Web browser

+2%

Mobile +49%

Email -11%

4%

24%

72%

Share of display revenue Q1 2015

Revenue per device

This year the used definition for mobile has been changed. In previous studies the share of mobile was based on the advertiser allocation of mobile budget. However due to the introduction of technical cross device solutions such as responsive websites there is a rising share of budget that is device independent (from the advertisers perspective). We discussed this trend with the taskforce mobile of IAB Netherlands, and agreed that mobile revenue is now based on revenue generated by impressions delivered onto the actual device of the consumer.

Mobile

24% of display revenue is spend on mobile devices (incl. phone, tablet and in-app). Compared to previous mobile share of 18% in Q4 2014, the extra 6% is partially generated by device independent budget that is delivered to mobile.

Web browser

The majority of display revenue is generated through desktop and laptop devices however the growth of this revenue stream is starting to evaporate.

Email

Email advertising traditionally shows the least share within display advertising during Q1 and accounts for 4% of the revenue in 2015, showing a decline compared to the 5% market share of Q1 last year.



Trend of programmatic spend

Programmatic display advertising spend per format


Note: Programmatic market includes estimates of the size of FBX and GDN.

Source: IAB programmatic study, Survey respondents, Deloitte analysis

Display advertising through programmatic channels (m€) / Y/Y Revenue growth (%)

19

23 24

36

26

3033

54

37

26%32%

43% 44%

36%30%

35%

48%

40%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2013 2014 2015

0

10

20

30

40

50

60

ProgrammaticProgrammatic display formats growth breakdown

Y/Y Growth2014

Y/Y GrowthQ1 2015

Embedded +35% +29%

Interruptive / rich media

+86% +130%

Video +126% +138%

Programmatic market

The online display advertising spend through programmatic channels increased with 40% in Q1 2015, totaling 37m€ in revenues. Catalyzer for this revenue growth is the strong shift of interruptive (e.g. rich media) formats finding their way to the exchange originating from traditional sales channels. Currently interruptive accounts for 14% revenue share within the programmatic exchange. Programmatic video still accounts for a small portion of the revenue stream within the exchange with a 5% market share, however programmatic video is likely to more than double in revenues this year due to its high momentum.



Methodology: Estimation


Company A Company A

Company B

Company B

Company X

Company X

Period 1 Period 2

Participating companies

Non-participating companies

New revenue numbers

Baseline revenue of non -participating companies is initially estimated by IAB Taskforces/ Deloitte research / Media buyers

Estimated revenue

• Growth of medium to small non –participating companies

1. Trend in growth from previous submissions

2. Known growth of similar companies (proxy)

• Growth of large non –participating companies

1. Trend in growth from previous submissions

2. Results from annual reports

3. Known growth of similar companies (proxy)

• Google and Facebook related revenue:

1. Quarterly earnings

2. Google and Facebook media buyers feedback

3. Public datasets

For each report Deloitte tries to include as many companies as possible to ensure an accurate representation of the online advertising market, however due to various reasons we cannot collect figures from all companies active in the online advertising market.

Known growth

Estimated growth

Known revenue

• Realized net/net revenue is disclosed to Deloitte



Participating companies


1. addurance2. Adfactor3. Autotrack4. BrandDeli5. Cadreon6. Daisycon7. Funda8. Mannenmedia9. Marktplaats10. Massarius11. MediaScience12. Microsoft13. MobPro14. Nakko Media15. Nochii Online Marketing16. NRC Media17. Perform Group NL18. Persgroep19. RTL Nederland20. Sanoma

21. SBS Broadcasting22. Semilo23. Smartclip24. SpotXchange Benelux25. Ster26. Telegraaf Media Groep27. The Online Company28. To2029. Tweakers30. Voetbal International31. Widespace32. Yonego33. Zoover



Contact

For questions concerning this research feel free to contact:


Nathalie La VergeDeloitte | Deloitte DigitalTel: +31 (0)6 23 367 886Email: [email protected]

Nathalie La Verge is a manager with the Risk Services practice from Deloitte with more than 10 years of experience in risk consulting for companies in the Technology, Media & Telecommunications (TMT) industry. Nathalie leads all Deloitte projects commissioned by IAB Netherlands.

Jorrit SlootDeloitte | Data AnalyticsTel: +31 (0)6 82 019 387Email: [email protected]

Jorrit Sloot is a consultant within the Deloitte Risk Services practice and specialized in risk analytics, data modeling, mathematical and quantitative data analyses for the digital industry. Jorrit supported the research of all IAB Ad Spend/ Programmatic and Search studies for the Netherlands since 2013.

Govaert PlesmanIAB NederlandTel: +31 (0)85 401 0802Email: [email protected]

Dutch IAB research includes the IAB Netherlands/ Deloitte Ad Spend Study, all IAB commissioned research, and assisting Dutch IAB members with their research projects. Also responsible for shaping the IAB knowledge base so that it meets members' needs moving forward.


mailto:[email protected]



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