2009 uk online adspend study

2009 UK online adspend study

Agenda

1. Introduction

2. Study methodology

3. Market background and trends

4. UK online adspend – headline results

5. The digital media mix

6. Industry categories

7. Summary

8. Looking ahead…

9. Questions

1. INTRODUCTION

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

2. METHODOLOGY

Estimated data

• Study includes estimation of data for other half year where data was submitted only for either H1 09 or H2 09, assuming 0% growth between both half years

• Study includes estimation of Facebook revenues, based on views from Enders Analysis, GroupM, Isobar, IAB, PwC

• Except for above, reported figures have not been adjusted for organisations that did not participate in survey

Reported vs estimated survey data

Reported data

• Survey includes revenues submitted by 83 participants

• The figures are drawn up on the basis of site declaration and have not been not verified

• Online recruitment sites reported by WARC

• Google revenues included in total figures are based on published financials

98% of 2009 total recorded

adspend

2% of 2009 total recorded

adspend

Adjustments and like-for-like growth reporting

Adjustments

• Figures are adjusted for double-counting, based on information provided by survey participants

• YouTube revenues have been estimated based on the same expert views as Facebook. This is not incremental spend as already included in Google total revenues but it is display rather than search spend and we have shifted revenues accordingly from search into display

• Total advertising revenue is reported on a gross basis

Like for like growth reporting

• This study reports for the first time like-for-like growth figures not only for total spend but also main formats (display, search, classifieds)

• Only companies which submitted in both 2008 and 2009 have been included in the YOY growth calculations

• A total of 23 companies’ figures are not included in the like-for-like comparisons

• In addition, the estimates for Facebook and YouTube have also been excluded

2009 research participants

Absolute Radio, Accelerator Media, Adconion, AD2-One, Adify, Affiliate Window, AND, AOL, AOL Networks, Bauer, BBC Worldwide, Bloomberg,

BMJ Publishing, BSkyB, BuyAssociation, Channel4, Chinwag, Commission Junction, CNet, Conde Nast, Dennis Interactive, DGM, DPG, Ecircle, Emap, eType, Fish4, Fox Networks, Friends Reunited, Financial

Times, Future Publishing, Glam Media, Global Radio Interactive, Goallover, Gumtree, Guardian, Handbag (NatMag), Haymarket

Business Solutions, Haymarket Motoring, Hachette, Hello, HiMedia, Independent News, IDS, The Institute of Engineering and Technology,

IPC, Interactive Prospect Targeting, is4profit, ITV, iVillage, Jobsite, Last.fm, MySpace, Microsoft, Net Communities, News International, Online Media Group, Orange, Oridian, Propertyfinder, Reed Business Information, Real Media, Reuters, Rightmove, Specific Media, Skupe, Tesco, Telegraph, Tiscali, TradeDoubler, Trader Media, Trinity Mirror, UKTV, Unanimis, Upmystreet, Value Click, Viacom Brand Solutions,

Virgin Media, WebTV Enterprise, Webgains, Wallpaper, Yell, Yahoo! …Plus further recruitment sites, courtesy of WARCRepresenting thousands of UK websites

3. MARKET BACKGROUND & TRENDS

UK GDP dives to – 6% YOY in Q2 2009

GDP GrowthEconomy grows by 0.3% in Q4 2009

IPA Marketers’ Bellwether Q4 2009

• Total budgets revised down for the 9th quarter in succession• But internet budgets were revised up for the 2nd quarter running

Industry Forecasts for Online in 2009

Enders Analysis +2.2% (October 2009)

Industry Forecasts for Online in 2009

Zenith Optimedia -2.1% (Oct 2009)

Industry Forecasts for Online in 2009

GroupM +2.1% (Dec 2009)

This time last year

• 2008 was a strong year for online• Total spend grew from £2.8bn to 3.35bn• Online’s share of media grew to 19.2%• However total revenues in Q4 were

marginally down as the recession kicked in

Active users up 3 million since January 2009

Source: UKOM APS Jan 10; Nielsen Netview Jan 09-Dec 09

Jan 2010:Digital Universe 46.4m aged 2+Active Universe 38.9m aged 2+

92% on broadband (63% plus 2Mb)

Source: UKOM APS Jan 10

Netbook sales rocket

Online shopping defies the recession

14% YOY growthin 2009

4. UK ADSPEND HEADLINE RESULTS

£3,541.08mmarket in 2009

An increase of £191.39m year-on-year

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

2009 vs. 2008

4.2% increase

on a like for like basis

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

£153.1m

Annual Online AdSpend Growth2000 - 2009

£165.7m£196.7m£465.0m

£825.1m

£1,366.5m

£2,015.8m

£2,812.7m

£3,349.8m£3,541.1

5. Online in ContextBreaking market trends in the UK ad industry

% share of revenues for January to December 2009

24.0%

22.9%

18.5%

10.9%

5.1%4.1%

3.3%1.2%

10.1%Television *InternetPress DisplayDirect MailPress ClassifiedOutdoorDirectoriesRadioCinema

Total advertisingmarket

£15,446.7

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

NOTE * Television includes sponsorship revenues for the first time

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.

Online’s market share for 2009 is 23%

-21.8%

-9.8%

-2.8%

4.2%7.6%

-32.2%

-16.4%-16.7%-17.4%

PressClassified

Directories Direct Mail Outdoor PressDisplay

Radio TV * Internet Cinema

Source: PricewaterhouseCoopers / Internet Advertising Bureau, The Advertising Association / WARC: WARC estimate for directories.

* NOTE Television includes sponsorship revenues for the first time

Total advertising market growth = -11.2%

Year on year growth for 2009

Online’s growth continues in downturn

Mar

ket S

hare

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

Online’s market share for 2009 is 23%

0

200

400

600

800

1000

1200

Q198

Q398

Q199

Q399

Q100

Q300

Q101

Q301

Q102

Q302

Q103

Q303

Q104

Q304

Q105

Q305

Q106

Q306

Q107

Q307

Q108

Q308

Q109

Q309

£ m

illio

ns

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

N.B. WARC Recruitment data included from 2003NOTE * Television includes sponsorship revenues for the first time

Radio

Outdoor

Internet

Press - Display

Television *

Press - Classified

Direct Mail

Online’s quarterly totals show growth

180.8505.6 552.4 594.7 633

782.2

1542.7 1552.6 1685.9 1708.3

2852.7

3541.13712.9

Cinema BusinessMagazines

Directories NationalNewspapers

Direct Mail PressDisplay Total

Television *

£m

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

NOTE * Television includes sponsorship for the first time

Full year 2009

Directories are estimated

Full year adspend revenues across all media

• Online advertising is still showing growth in 2009

• Internet advertising reaches £3.54bn In 2009

• Online achieved a share of 23%, up 4 Points on 2008 (19%)

• The market grew on a like for like basis by 4.2% year on year

• Online and Television continue to dominate

2009 – full year summary

6. THE DIGITAL MEDIA MIX

The digital media mix

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC. Chart above does not include Solus email at 0.2% market share

% share of revenues for the full year 2009

Full year total

£3,541.1

The digital media mix£

mill

ions

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

On a Like-for-Like basis Display and Classifiedsdecreased, while Search increased

L for L-4.4%

L for L-5.3%

L for L+9.5%

The digital media mix£

mill

ions

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. Reported Figures, not like for like comparison

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

Year on year comparison

H2 2009 search figures up year on year

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

Classified market is stabilising

£m

Reported Figures, not like for like comparisonSource: Internet Advertising Bureau / PricewaterhouseCoopers

The display digital media mix

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

Full year display total£709.30m

% share of display revenues for the full year 2009

Display: Still dominated by banners, video shows exceptional growth

£m

Reported Figures, not like for like comparisonSource: Internet Advertising Bureau / PricewaterhouseCoopers

Video

Video shows market beating growth

Source: Internet Advertising Bureau / PricewaterhouseCoopers

£28.31min 2009

£ m

illio

nsDisplay formats showing actual

growth in 2009

Reported Figures, not like for like comparison

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

+18% +8%+8% +22%+44%

+2%

7. INDUSTRY CATEGORIES

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

IAB estimates for industry sector shares are based on categorised net revenue from media owners provided by PwC. Data excludes unclassified, multi-advertiser and misc figures and covers 63% of online display revenues in H2 2009.

H2 2009 Industry Sector display market shares

Based on 63% of total display ad spend

8. LOOKING AHEAD

Looking ahead

• Audience still growing (and buying more devices)

• Users on 2MB+ broadband rising

• Time online - especially on social sites - rising

• Digital share predicted to grow

• Improved audience measurement and video appealing to brand advertisers

All point to higher growth in 2010

9. SUMMARY

Summary

• Online ad spend grows to £3.54 billion in 2009

• Up 4.2% on a Like for Like basis→ Display down 4.4% on a Like for Like basis - £709 million

→ Classified down 5.3% on a Like for Like basis - £677 million

→ Search up 9.5% on a Like for Like basis - £2,148 million

• Online pre & post roll grows dramatically

• Telecomms, Entertainment & Media, Retail, Finance and Consumer Good are best performing sectors

Coverage so far

Big thank you

and all contributing media owners

10. QUESTIONS

For more informationinfo@iabuk.net 020 7050 6953

Disclaimer

The IAB retained PricewaterhouseCoopers LLP (the UK firm) (‘PwC’) to compile the online adspend figures collected by the IAB from its members in July 2009 through March 2010 and to deliver to the IAB the topline figures collated from this review; PwC has not verified the information which it received from the IAB, and provides no opinion or other form of

assurance with respect to such information.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or

completeness of the information contained in this publication, and, to the extent permitted by law, neither the Internet Advertising Bureau UK (the ‘IAB’) nor any of the

IAB’s contributors/subcontractors accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance

on the information contained in this publication or for any decision based on it.