uk online adspend study results for january to june 2006 prepared by pricewaterhousecoopers for the...

UK Online Adspend Study Results for January to June 2006

Prepared by PricewaterhouseCoopers for the IAB

Background

• Census of all major UK online media owners

• Official Advertising Association figures since 1997

• Information collected each half year

• Analysis available by

• Format

• Industry category

Agenda

• Study methodology• Market background and trends• UK online adspend – headline results• Online in context• The digital media mix• Industry categories• In summary• Questions & answers

Methodology

A brief history…• The IAB has been working with PwC since 1997 to survey the value of

the online advertising market.• PwC have run projects in Europe and North America to assess the size

of the interactive media markets.• These figures have become the industry standard for measuring

advertising spend and in the UK are now used by the Advertising Association.

• 90 companies have participated in the survey representing thousands of websites.

• Reported figures are not adjusted to account for other organisations that have not participated.

• Total advertising revenue is reported on a gross basis.

• The figures are drawn up on the basis of site declaration. They cover thousands of UK websites, but by no means all.

Research participants

Acxiom Ad2-one Adept Scientific Adlink AdRevenue Advertising.com Adviva AOL AskJeeves Associated Northcliffe Digital Autotrader BBC BlueLithium

BMJ Bolt Blue BSkyB Channel 4 Chrysalis Radio Classic FM CNet Condenast Confetti Dennis Interactive Dixons DGM eCircle Economist EDR

EMAP eType Faversham House Group Financial Times Find.co.uk Findaproperty Fish4 Five Friends Reunited GCap Media Google Guardian Habbo Handbag Haymarket Independent IPC Media iPoints IPT ITN ITV

iVillage Jetix Jobs.ac.uk Jobsite Loot Lycos Manchester Online Media Brokers Memedia Miva Moneyextra Monster MSN National Magazines Net

Communities Netrecruit News International Orange Real Media Reed Business Information Reuters Rightmove Scotland Online Sift SRH

Telegraph Tesco Tiscali TMN Tradedoubler UK Net Guides Unanimis Upmystreet Utarget Valueclick Virgin Radio WME Workthing Yahoo! Yell

…Plus further recruitment sites, courtesy of WARC

Representing thousands of UK websites

Market background and trends

3.64.6

6.27.2

8.710.7

12.714.2

17.519.1

20.821.7

23.1 23.624.5 24.9

26.828.1

29.3 29.8

Jun1996

Dec1996

Jun1997

Dec1997

Jun1998

Dec1998

Jun1999

Dec1999

Jun2000

Dec2000

Jun2001

Dec2001

Jun2002

Dec2002

Jun2003

Dec2003

Jun2004

Dec2004

Jun2005

Dec2005

Nearly 30m people now onlineUsed in last 12 months

Source: NOP World, 2005

Millions of people 63%

10m households with Broadband in Britain

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Q201

Q301

Q401

Q102

Q202

Q302

Q402

Q103

Q203

Q303

Q403

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Per

cent

age

of h

ome

user

s

Source: BMRB Internet Monitor, Q4 2005 Base: All who have used the Internet at home on a computer in the last month

Broadband access at home

Average 23 hours a week online

Online sales hit 30bn

Online helps High Street

Tesco’s £1bn online sales

P&G increases digital spend?

UK Online Adspend Study Results for the first half of 2006


£917.2mmarket in the first

half of 2006

(up from £630.5m a year ago)

40.3% increaseOn a like for like basis

Including new contributors £286.7m was added to the market value, giving a 45.5% increase

First Half 2006 vs. first half 2005

Online advertising almost £½ billion a quarter

47.4 42.8 36.6 38.9 36.6 45.2 51.163.8

88.0105.2

119.7

152.1171.8

224.1

303.5327.0

350.5

461.2

385.5

456.0

174.6

254.6

0

50

100

150

200

250

300

350

400

450

500

Q101

Q201

Q301

Q401

Q102

Q202

Q302

Q402

Q103

Q203

Q303

Q403

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Q106

Q206

£ m

illio

ns

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

‘01 ‘03‘02 ‘04 ‘05 ‘06

Online in context…

Breaking market trends in the UK ad industry

22.7%

20.9%

17.4%

13.1%

5.1% 3.4% 0.8%

5.9%

TVPress - DisplayPress - ClassifiedDirect MailInternetDirectoriesOutdoorRadioCinema

Source: PricewaterhouseCoopers / Internet Advertising Bureau / The Advertising Association / Radio Advertising Bureau / WARC

Internet 10.5%

Online Breaks 10% barrier January to June 2006

Total advertisingmarket

£8.7bn

-2.7%

2.0%

11.9%

40.3%

-8.3%

-0.5%-1.1%-1.3%

PressClassified

Radio TV PressDisplay

Direct Mail Outdoor Cinema Internet

Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC

Online drives the whole marketYear on year growth for the first half 2006

Total advertising market growth = 1.4%

Mar

ket

Sha

reOnline’s share growth accelerates

Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC

2.5%3.3%

4.2%

5.5%

7.3%

8.4%

10.5%

H1 2003 H2 2003 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006

0

200

400

600

800

1000

1200

Q198

Q298

Q398

Q498

Q199

Q299

Q399

Q499

Q100

Q200

Q300

Q400

Q101

Q201

Q301

Q401

Q102

Q202

Q302

Q402

Q103

Q203

Q303

Q403

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Q106

Q206

Radio

Outdoor

Internet

Direct Mail

Press -Classified

Press - Display

Television

Online’s ascendancy continues£

mill

ions

Source: PricewaterhouseCoopers / Internet Advertising Bureau / Advertising Association / Radio Advertising Bureau / WARCN.B. WARC Recruitment data included from 2003

Radio

Outdoor

Internet

Press - Display

Television

Press - Classified

Direct Mail

Online in contextFirst half 2006

73.4

297.6403.3 443.8 471.1 515.5

917.2 993.41,139.8

1,822.61,978.6

1,473.01,518.2

Cinem

a

Radio

Consu

mer

Mag

s

Outdo

or

Busine

ss M

ags

Direct

ories

Inte

rnet

Nation

al N

ewsp

aper

s

Direct

Mail

Regio

nal N

ewsp

aper

s

Press

- Clas

sifie

d

Press

- Disp

lay

TV

£m

Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC / Radio Advertising Bureau

Online advertising market for the year to June 2006…

£1653.1m

July 2005-June 2006

Summary – First half 2006

• Online advertising driving growth of the entire media market

• Internet advertising approaches £1bn in the first half of 2006 (£917.2m)

• Online achieved a share of 10.5%, up 3.2 points from the first half of 2005 (7.3%)

• The market grew 40.3% year on year from a high base

• Online now closing the gap on national press

The digital media mix

The developing mix of ad products

The digital media mix% share of revenues for January to June 2006

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARCIAB estimates for actual ad spend by format are based on samples of categorised revenue from key IAB members provided by PwC. Data excludes unclassified figures.

23.5%

57.9%

0.9%

17.7%

DisplayClassifiedsPaid for searchSolus Email

Half year total£917.2m

The digital media mixAll format groups have experienced actual growth

162.1131.4

337.0

215.9

162.2

531.3

Display Classifieds Paid for search

H1 2005 H1 2006

£ m

illio

ns

+33%

+23%

+58%


15.1%

11.2%

6.5%

57.9%

0.7%

1.0%

0.4%

0.7%

5.5%

0.9%

Banners / Embedded

SponsorshipsInterruptive formats

Tenancies

Other displayDisplay ads on email

Solus email

Recruitment classifieds

Further classifiedsPaid for search listings

The digital media mix% share of revenues for January to June 2006


£138.9m

£9.6m

£6.8m

£50.7m

£5.9m

£4.0m

£7.9m

£102.8m

£59.3m

£531.3m

The digital media mixYear on year comparison

£ m

illio

ns

IAB estimates for actual ad spend by format are based on samples of categorised revenue from key IAB members provided by PwC. Data excludes unclassified figures.

3.2

6.6

7.5

11.9

4.0

5.9

6.8

7.9

9.6

50.7

59.3

102.8

138.9

531.3

27.5

37.0

94.4

105.4

337.0

Display ads on email

Other display

Interruptive formats

Solus Email

Sponsorships

Tenancies

Further classifieds

Recruitment classifieds

Banners / Embedded

Paid for search listings

H1 2006H1 2005


Strong growth of Search continues

181.2

248.5

337.0

431.4

531.3

H1 2004 H2 2004 H1 2005 H2 2005 H1 2006

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

Search is the gateway to brands

• People use search as a stepping stone to find the advertiser’s brand site

• 88% of those on broadband use a search engine every week

• More than 8 out of 10 users rely on a search engine after partially remembering a website address

• Search is now bigger than outdoor mediaSource: Ipsos Insight conducted for Isobar and Yahoo! Search, May 2006

Yahoo! Search Marketing, ISOBAR, UDA research 2005

Growth in further classifieds

0

20

40

60

80

100

120

140

160

180

H1 2004 H2 2004 H1 2005 H2 2005 H1 2006

Recruiment classifieds Further classifieds

£m


Display: breadth of formats

0

50

100

150

200

250

H1 2004 H2 2004 H1 2005 H2 2005 H1 2005

Banners / Embedded Sponsorships Interruptive formats

Display ads on email Tenancies Other display

£m


Formats summaryJanuary to June 2006

• With revenues of £531.3m, search maintained its dominant position over the six month period

• Year on year, display was up 33.2% to £138.9m while search increased by 57.7% and classifieds grew by 23.4% to £162.2m

• The growth of recruitment classifieds is slowing, up 9% to £102.8m. Other classifieds continue to enjoy strong growth, up 60.4% to £59.3m for the half year

Industry categories


Recruitment sector leads the market in the first half of 2006

IAB estimates for industry sector shares are based on samples of categorised net revenue from key IAB members provided by PwC. Data excludes unclassified figures and covers 48% of online revenues in H1 2006.

0.3%

0.5%

1.3%

1.3%

3.0%

4.3%

4.6%

4.7%

8.1%

8.9%

13.8%

14.3%

15.6%

19.5%

Other

Gardening & Agriculture

Govt & other organisations

Business & Industrial

Retail

Property

Consumer goods

Telecoms

Travel & Transport

Entertainment & Media

Automotive

Technology

Finance

Recruitment

Recruitment & Finance continue todominate the onlineadvertising market


Sector Market Shares

1.0%

1.5%

1.1%

2.8%

11.8%

19.4%

0.3%

0.5%

1.3%

1.3%

3.0%

4.3%

4.6%

4.7%

8.1%

14.3%

15.6%

4.0%

3.6%

1.2%

1.6%

8.0%

19.7%

13.5%

10.8%8.9%

13.8%

19.5%

Other

Gardening & Agriculture

Govt & other organisations

Business & Industrial

Retail

Property

Consumer goods

Telecoms

Travel & Transport

Entertainment & Media

Automotive

Technology

Finance

Recruitment

H1 2006

H1 2005

IAB estimates for industry sector shares are based on samples of categorised net revenue from key IAB members provided by PwC. Data excludes unclassified figures and covers 48% of online revenues in H1 2006.

Industry sectors summaryJanuary to June 2006

• The top 3 categories accounted for almost half of online ad spend (49.4%) and continued to be led by the Recruitment sector

• Growth in the Consumer goods and Retail categories is a positive sign, but there is still a lot of potential

Spotlight on Automotive

10.8%

12.4%

13.8%

H1 2005 H2 2005 H1 2006

• Automotive’s market share shows steady growth

• Online is effectively used as both a branding medium and a direct response driver

• Investment is made across all 3 format categories – search, display and classified

Market S

hare

Renault Clio

Overall Summary

Overall summary

• Online ad spend leaps by 40.3% on a like for like basis in a relatively flat media market.

• £1,653.2m spent across the twelve months ending June 2006.

• Market share breaks the double digit barrier as online reaches 10.5% of advertising revenues in H1 2006.

• Online sustaining healthy growth in face of a depressed advertising market

• Strong growth continues even from a high base

• Search, display and classifieds have all experienced impressive increases

Overall summary

The next milestone

£2 billion• A real possibility by the end of the year • This would make online bigger than

national press

Online closes on national press

0

100

200

300

400

500

600

Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06

Internet National Press

£m

Online is half the size of TV

£917m £1,979m

All the companies taking part, representing thousands of websites

and to

Our thanks to…

Paul PilkingtonDirector

Colin MacleodResearch Director

Paul TaylorProduction Editor&

http://www.warc.com/

UK Online Adspend Study Results for January to June 2006


For more [email protected] 7886 8282

uk online adspend study results for january to june 2006 prepared by pricewaterhousecoopers for the...

Documents

online advertising market

week online slide

iab slide

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methodology slide

home slide

britain slide

bn online sales slide