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H1 2008 UK online adspend study

H1 2008 UK online adspend study. 1. Introduction. Agenda. Introduction Study methodology Market background and trends UK online adspend – headline results Online in context The digital media mix Industry categories Summary Looking ahead… Questions. Background.

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H1 2008 UK online adspend study

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  1. H1 2008 UKonline adspend study

  2. 1. Introduction

  3. Agenda • Introduction • Study methodology • Market background and trends • UK online adspend – headline results • Online in context • The digital media mix • Industry categories • Summary • Looking ahead… • Questions

  4. 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

  5. 2. Methodology

  6. A brief history… • The IAB has been working with PwC since1997to survey the value of the online advertising market • We have run projects in Europe and North America to assess the size of the interactive media markets • These figures have become theindustrystandardfor measuring advertising spend • 130 companieshave participated in the survey • Reported figures arenotadjusted to account for other organisations that have not participated • Total advertising revenue is reported on agrossbasis • The figures are drawn up on the basis of site declaration • They cover thousands of UK websites, but by no means all

  7. Research participants Accelerator Acxiom Ad2-one Adept Scientific AdLINK Ad Revenue AdSales4U Advertising.com Adviva AOL Affiliate Window AskAssociated Northcliffe Digital Autotrader BBC Worldwide BloombergBlue Lithium BMJ Bolt Blue Bounty BSkyB Buy AssociationBuy.at (Perfiliate)Channel 4 Chinwag Chrysalis Radio Classic FM CNETConde Nast ConfettiDennis Interactive DGM Drive PM Dixons Double Fusion E-circle Economist EDR EMAP E-Type Euroclick Everyclick Exchange and Mart Faversham House Group Financial Times Find.co.uk FindapropertyFish4 FiveFlirtomatic Friends Reunited Future Publishing GCap Radio Global Radio InteractiveGoogleGuardianHabboHachette FillpacchiHandbagHaymarket Hello IDG Independent I.E.T (Institute of Engineering and Technology) IPC Media IPT i-Points Is4Profit ITNITV iVillageJetix Jobs.ac.ukJobsite Johnston PressLast FM Loot Lycos Manchester Online Media Brokers Memedia Miva Monetise MoneyextraMonster MSN My Space National Magazines Net Communities Netrecruit News InternationalOrange Oridian OverturePigsback Prime LocationProperty Finder Real Media Reed Business Information Reuters Right Move Scotland Online Sift Simply Media TV SRH Skupe Tacoda TeamtalkTelegraphTescoTiscali TMN Media Tradedoubler Trinity Mirror UK Net Guides UKTV Unanimis Upmystreet U Target ValueclickViacom Brand Solutions Vibrant Virgin Media Virgin Radio Wallpaper* WME Workthing Yahoo! Yell …Plus further recruitment sites, courtesy of WARC Representing thousands of UK websites

  8. 3. Market backgroundand trends

  9. Doom and Gloom!

  10. Media scare stories..

  11. Number of Internet Users(Used in last month) Source: BMRB’s Internet Monitor, May 2008

  12. Large majority of broadband services are now above 2 MB 46% have used wireless broadband at home in the last month (May 2008) Base: All respondents with a broadband connection at home. Q: Do you know the connection speed of your home broadband package? (May 07 - 388; May 08 - 392) Source: BMRB Internet Monitor May 2007; May 2008

  13. Where were we this time last year?.. • Online adspend £1.3bn in H1 2007 • The medium grew by 41.3% from £917.2m in H1 2006 • Online overtook Direct Mail • Continuous quarter on quarter growth

  14. 4. UK Online Adspend StudyResults for the H1 2008 Prepared by PricewaterhouseCoopers for the IAB

  15. £1,669.6mmarket in H1 2008Anincreaseof£335.3m year-on-year Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  16. H1 2008 vs. H1 2007 21% increase New contributions in H1 2008 represented£97.2m on a like for like basis Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  17. Online advertising reaches £853m in Q1 08 ‘06 ‘02 ‘08 ‘07 ‘05 ‘03 ‘01 ‘04 £ millions A seasonal “dip” in Q2 appearing? Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  18. 5. Online in context… Breaking market trends in the UK ad industry

  19. H1 2008 market share 18.7% (14.7% in H1 2007) % share of revenues for January to June 2008 Total advertisingmarket £8.95bn 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  20. Online continues to drive market Year on year growth for H1 2008 Internet Total advertising market growth = 0.3% Cinema Television Radio Press Display Directories Outdoor Direct Mail Press Classifieds Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC: WARC estimate for directories – offline only

  21. Online’s share growth accelerates to 19% Market Share Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC

  22. Television Press - Display Direct Mail Press - Classified Internet Outdoor Radio Online closes in on the top two £ millions N.B. WARC Recruitment data included from 2003 Source: PricewaterhouseCoopers / Internet Advertising Bureau / Advertising Association / Radio Advertising Bureau / WARC

  23. Online almost reaching Press Display total H1 2008 £m Directories are estimated Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC / Radio Advertising Bureau.

  24. Summary – H1 2008 • Online advertising growth supports the entire media market • Internet advertising reaches £1,669.6m in H1 2008 • Online achieved a share of 18.7%, up 4 points from H1 2007 (14.7%) • The market grew on a like for like basis by 21% year-on-year, maintaining growth in a difficult climate

  25. 6. The digital media mix The developing mix of ad products

  26. The digital media mix % share of revenues for the H1 2008 H1 2008 total £1,669.6m 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  27. The digital media mix All online formats continue to experience growth +28.7% +25.4% +16.4% £ millions 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  28. The digital media mix % share of revenues for the H1 2008 £277.7m £10.8m £5.1m £7.6m £7.2m £3.9m £14.6m £7.1m £6.1m £181.3m £161.5m £5.4m £981.4m Full year total £1,669.6m 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  29. The digital media mix Year on year comparison * £ millions * 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. * First time pre-post roll and display affiliates included in survey. Potentially under-reported Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  30. Strong growth of Search continues £m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  31. Advertisers like accountability “I think you’ll see some people moving their money away from marketing streams that are less accountable, and moving into digital areas – search is a great example of that… in terms of capping the dollars you spend but making sure that every dollar is absolutely accountable.” Emma Jenkins – Head of Interactive Marketing, Procter & Gamble

  32. Growth in all classifieds £m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  33. Classifieds led by key players

  34. Display: formats dominated by banners & rich media * 333.9 £m * First time pre-post roll included in survey. Potentially under-reported Source: Internet Advertising Bureau / PricewaterhouseCoopers

  35. Embedded formats growth greater than total growth +36.4% -79.8% -47.6% -54.0% -23.3% -11.7% £ millions 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. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  36. 41% of gross display spend through networks

  37. Formats summary – H1 2008 • With revenues of £981m in H1 2008, search maintained its dominant position • YoY, display was up 16.4% to £333.9m while search increased by 28.7% and classifieds were up by 25.4% to £348.2m • Core “embedded” display rose36.4%YOY • Classifieds: recruitment increased by 27.6% to £181.3m and other classifieds grew by 23.1% to £166.9m Source: Internet Advertising Bureau / PricewaterhouseCoopers

  38. 7. Industry categories

  39. Recruitment continues to lead the market Based on 36% of total ad spend – largely display And classifieds 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 36% of online revenues in H1 2008. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  40. Sector Market Shares Based on 36% of total ad spend – largely display and classifieds 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 36% of online revenues in H1 2008. Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  41. Industry sectors summary – H1 2008 • Recruitment continues to take the highest share andis also theshare point winner (+6.6 points) • Automotive retains second place for the third wave running • Property overtakes Finance and Technology for the first time to take the third spot • Othercategories have lost share at the expense of core classifieds categories

  42. Isolating display gives a different picture Based on 87% of total display ad spend 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 87% of online display revenues in H1 2008. NB – an immaterial amount of these figures are classifieds Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

  43. 8. Summary

  44. Figures make an impact once again!

  45. Summary • Online ad spend continues growing 21% year-on-year (on a like-for-like basis) to reach £1,669.6m in H1 2008 • Online achieved a share of 18.7%, up 4 points from H1 2007 (14.7%) • Online closing in on Press Display

  46. Summary • Search (+28.7%) and display (+16.4%) both experienced impressivegrowth in revenue in the current market, with embeddedformats (+36.4%) performing way ahead of the total growth. • Classified (+25.4%) also performed well • Record breaking quarter in Q1 08

  47. 9. Looking ahead

  48. Online draws level with total Press display £m Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC

  49. Could online overtake TV next year? £m Source: PricewaterhouseCoopers / Advertising Association / Internet Advertising Bureau / WARC

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