Double Digit Growth for Online Advertising as Display Drives European Growth Rate to 15.3% YoY

Barcelona : Display advertising is back! That’s according to figures just released by IAB Europe that show a revival in digital Display in 2010. With an average growth rate of 21.3%, Display overtook Search advertising as the fastest growing online ad format in Europe. Search, which has been the catalyst of online advertising growth in recent years, increased 15.1% in the same period across the 25 markets measured. Video, mobile and social media all contributed to the powerful performance of Display.

IAB Europe’s annual AdEx survey is the definitive guide to the state of the European advertising market. Released at IAB Europe’s Interact Congress in Barcelona this morning, it shows the online advertising market accelerating at a growth rate of 15.3% in 2010 – outperforming the overall European advertising market which grew 5.0% in the same period. Total online adspend was EUR17.7bn in 2010, compared to EUR15.3bn in 2009. Market growth ranged from 37% in Russia and 24% in the Czech Republic, to 14% in Denmark and 7% in France.

Compiled by IHS Screen Digest, the research covers the entire European region, from the mature markets of Western and Northern Europe to the emerging markets in Eastern and Southern Europe for the calendar year 2010. New to the report is the Czech Republic.

The markets with the highest online adspend in the report are UK, Germany, France, Netherlands, Italy and Spain (in that order). Together they account for almost three quarters (74%) of the total online advertising market. Central and Eastern Europe (CEE) markets now represent almost a tenth (9.8%) of the total.

Display’s Brand Boost

Display advertising enjoyed growth rates of 20% or more in many markets – both emerging and mature – during 2010. Above average growth rates were experienced in Ireland (31%), Spain (30%) and Russia (27%).

The continued growth of online TV inventory, and long-form video consumption, pushed up spend while simultaneously maintaining high CPM (cost per thousand). Online video adspend has doubled in most markets. In Spain online video grew 125% to a value of EUR13m; growth in the UK was 90%, to a market value of EUR63m.

Super Search

Paid search continued to grow double-digit at an average of 15.1%. It remains the biggest category in online advertising, with 45% of total advertising spend compared with 33% for Display and 22% for Classifieds and Directories. Whilst some of the more established markets experienced smaller increases (UK +8% like-for-like, France +10%) many saw explosive growth (Hungary +44%, Poland +31%).

Mobile Advertising Gets Carried Away

Mobile search and mobile display are included in the AdEx survey for the first time this year. Although mobile adspend figures are available for only 12 of the 25 markets, they confirm that the long-awaited take-off of mobile advertising has been realised thanks to the advent of the smartphone/3G/apps ecosystem. In those markets, mobile adspend already accounts for 2% to 3% of total online adspend.

The Big Picture

With EUR17.7bn of adspend last year, online now accounts for 18% of the entire European advertising market. It is now beyond 20% in some markets (UK 29%, Denmark 28%) whilst it’s only 5% in Greece and 4% in Romania. European market value is smaller than the US which also experienced a 15% growth rate last year and is now worth $26bn/EUR19.6bn.

According to Vincent Letang, Senior Analyst at IHS Screen Digest says “Back in 2009, video was the only growth engine in an otherwise flat Display market. In 2010 by contrast, three pillars – mobile, video and social – attracted new advertising investment. On top of fast-growing new formats, let’s not forget that traditional PC-based, banner-style formats have retained their appeal thanks to innovations in design and targeting and a rise in mainstream brands using Display for branding campaigns.”

Alain Heureux, President and CEO of IAB Europe, concludes “The IAB network has worked tirelessly to showcase how effective online Display advertising can be at supporting brand advertising campaigns. I am delighted to see that message has been getting through and the innovative ways brands are incorporating online in their advertising campaigns. At IAB Europe’s Interact Congress this week we’ll be recognising the best of online advertising creative at with the MIXX Awards. We will also be celebrating with the winners of the Research Awards – without this valuable insight, we would not be able to prove the contribution online makes to advertising campaigns.”

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