pwc iab webinar presentation hy2014
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8/10/2019 PwC IAB Webinar Presentation HY2014
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PwC
IAB internet advertising
revenue report2014 first six-months results
www.pwc.com
www.iab.net
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PwC
PwC
Agenda
2October 2014
Survey methodology
2014 first six-months results
First six-months and quarterly trends
Advertising formatsPricing models
Industry category spending
About PwC
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PwC
PwC
Survey Methodology
3October 2014
Survey Scope
The IAB Internet Advertising Revenue Report is part of anongoing IAB mission to provide an accurate barometer ofInternet advertising growth.
To achieve differentiation from existing estimates andaccomplish industry-wide acceptance, key aspects of thesurvey include:
Obtaining historical data directly from companiesgenerating Internet/online/mobile advertisingrevenues;
Making the survey as inclusive as possible,encompassing all forms of internet/online advertising,including websites, consumer online services, ad
networks, mobile devices and e-mail providers; and
Ensuring and maintaining a confidential process, onlyreleasing aggregate data.
Methodology
Throughout the reporting process, PwC:
Compiles a database of industry participants sellinginternet/online and mobile advertising revenues.
Conducts a quantitative mailing survey with leading
industry players, including web publishers, adnetworks, commercial online service providers, mobileproviders, e-mail providers and other online mediacompanies.
Acquires supplemental data through the use of publiclydisclosed information.
Requests and compiles several specific data items,
including monthly gross commissionable advertisingrevenue by industry category and transaction.
Identifies non-participating companies and applies aconservative revenue estimate based on availablepublic sources.
Analyzes the findings, identifies and reports key trends.
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PwC
PwC
Half year revenues totaled $23.1billion in 2014
4October 2014
Onlineadvertisingrevenueincreased 15.1%in HY 2014.
Inbillions
$20.1
$23.1
HY 2013 HY 2014Source: IAB
Internet Advertising Revenue Report, HY 2014
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PwC 5October 2014
Half year revenues totaled $23.1billion in 2014
Onlineadvertisingrevenueincreased 15.1%in HY 2014.
Inbillions
$20.1
$23.1
HY 2013 HY 2014
15.1%
Source: IAB Internet Advertising Revenue Report, HY 2014
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PwC
PwC 6October 2014
Second quarter revenues totaled$11.68 billion in HY 2014
Revenue in Q22014 was 13.8%higher than inQ2 2013.
Inbillions
$10.3
$11.7
Q2 2013 Q2 2014Source: IAB Internet Advertising Revenue Report, HY 2014
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PwCPwC 7October 2014
Second quarter revenues totaled$11.68 billion in HY 2014
Revenue in Q22014 was 13.8%higher than inQ2 2013.
Inbillions
$10.3
$11.7
Q2 2013 Q2 2014
13.8%
Source: IAB Internet Advertising Revenue Report, HY 2014
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PwCPwC 8October 2014
Strong Growth between Q1 2014and Q2 2014
Revenue in Q22014 was $264million higherthan in Q1 2014.
Inbillions
$11.4 $11.7
Q1 2014 Q2 2014Source: IAB Internet Advertising Revenue Report, HY 2014
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Source: IAB Internet Advertising Revenue Report, HY 2014
9October 2014
Strong Growth between Q1 2014and Q2 2014
Revenue in Q22014 was $264million higher
than in Q1 2014.
Inbillions
$11.4 $11.7
Q1 2014 Q2 2014
2.3%
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$0
$1
$1
$2
$2
$3
Source: IAB Internet Advertising Revenue Report, HY 201410
October 2014
In the early 2000s, internet advertising hit a bubbleQuarterly growth comparison, 1996-2002
Inbillions
97 98 99 00 01 0296
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$0
$2
$4
$6
$8
$10
$12
$14
Source: IAB Internet Advertising Revenue Report, HY 201411
October 2014
Since 2003, 78% of quarters have experiencedpositive growth over the prior quarter
Quarterly growth comparison, 1996
HY 2014
Inbillions
$11
Revenues have remainedabove $11 billion for
three consecutivequarters.
97 98 99 0900 01 02 03 04 05 06 07 08 10 11 12 13 HY 1496
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Source: IAB Internet Advertising Revenue Report, HY 2014
12October 2014
First six-months 2014 shows record revenuesHistorical revenue mix, first half vs. second half
Inbillions
$3.3 $4.6$5.8
$7.9$10.0 $11.5 $10.9
$12.1$14.9
$17.0$20.1
$23.1
$4.0$5.0
$6.8$9.0
$11.2$11.9 $11.8
$13.9
$16.8
$19.5
$22.7
?
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Last 6 months
First 6 months
* CAGR: Compound Annual Growth Rate
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Source: IAB Internet Advertising Revenue Report, HY 2014
13October 2014
Mobile shows the strongest growthAdvertising formatsHY 2014 results and growth rates
$9.1
$1.3
$0.9
$5.3
$1.5
$3.9
$0.4 $0.7
4%
1%
7%
76%
13%
4% 4%9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
Search Classifieds &Directories
LeadGeneration
Mobile Digital VideoCommercials
Banners Ads Sponsorship Rich Media
HY 2014 Revenue HY 2014 vs. HY 2013 % Growth
Inbillions
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Source: IAB Internet Advertising Revenue Report, HY 2014
14October 2014
Historical trends in internet advertising formatsRevenue share by major ad formats, 2006HY 2014
0%5%
10%
15%
20%
25%30%
35%
40%
45%
50%
Search Mobile Banner Ads Rich Mediaand Digital
Video
Classifieds LeadGeneration
Sponsorship
2006 2007 2008 2009 2010 2011 2012 2013 HY 2014
%o
ftotalrevenue
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PwCPwC 15October 2014
Mobile represents a significantpercentage of advertising
formats
For the halfyear in 2014,Mobile revenue
totaled $5.3billion
39%
28% 10%
51%
47%
2%
23%
Search Display Other
Mobile Search Mobile Display Mobile Other
Source: IAB Internet Advertising Revenue Report, HY 2014
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Search and display drive mobile advertisingMobile format ad revenue by category, Q2 2014 and HY 2014
1,42851%
1,33747%
542%
Q2 2014
Search Display-related Other
Total $2.8 Billion Total $5.3 BillionSource: IAB Internet Advertising Revenue Report, HY 2014
2,73351%
2,49847%
1032%
HY 2014
Search Display-related Other
16October 2014
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Distributing Mobile across formats demonstratesits importance to Search and Display
39%
28%
10%
23%
Search Display Other Mobile
Source: IAB Internet Advertising Revenue Report, HY 2014
17October 2014
51%
39%
10%
Search Display Other
Formats HY 2014(Mobile separated)
Formats HY 2014(Mobile included)
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Social media demonstrates continued growthSocial media ad revenues, 2012 HY 2014
Source: IAB Internet Advertising Revenue Report, HY 2014
18October 2014
$1.2
$1.7$1.9
$2.6
$2.9
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
1H 2012 2H 2012 1H 2013 2H 2013 1H 2014
CAGR*54%
Inbillions
* CAGR: Compound Annual Growth Rate
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Source: IAB Internet Advertising Revenue Report, HY 2014
19October 2014
Pricing modelsInternet ad revenues by pricing model, HY 2013 vs. HY 2014
33%
65%
2%
HY 2013
Impression-based Performance-based
Hybrid
34%
65%
1%
HY 2014
Impression-based Performance-based
Hybrid
Total $20.1 billion Total $23.1 billion
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Historical pricing model trendsInternet ad revenues by pricing model, 2005HY 2014
46% 48%
45%
39%37%
33%31% 32%
33% 34%
41%
47%
51%
57%59%
62%65% 66% 65% 65%
13%
5% 4% 4% 4% 5% 4% 2% 2% 1%
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 HY 2014
CPM Performance Hybrid
%o
ftotalrevenue
Note: Pricing model definitions may have changed over the time period depicted both within the survey process and as interpreted by respondents
Source: IAB Internet Advertising Revenue Report, HY 2014
October 201420
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Internet ad revenues by major industry category$20.01 B in HY 20123 vs. $23.1 in HY 2014
21%
13%12%
9%8%
7%6%
5% 5%4%
21%
13%12%
9% 9%
7% 7%
5% 5%4%
Retail FinancialServices
Auto Telecom LeisureTravel
PackagedGoods
Tech /Computing
Media Pharma &Healthcare
Entertain-ment
1H 2013 1H 2014
%o
ftotalreve
nue
Amounts do not total to 100% as minor categories are not displayed.Source: IAB Internet Advertising Revenue Report, HY 2014
October 201421
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PwCPwC October 9, 2013
PwC New Media Group
As business, accounting, and tax advisors to many of the worlds leading Entertainment, Media, and Communications(EMC) and Technology (Tech) companies, PwC (www.pwc.com) has an insiders view of trends and developmentsdriving the industry. With approximately 1200 practitioners serving EMC and Tech clients in the United States, PwC isdeeply committed to providing clients with industry expertise and resources. In recent years, our pioneering work inEMC and Tech has included developing strategies to leverage digital technology, identifying new sources of financing,and marketplace positioning in industries characterized by consolidation and transformation. Our experience reachesacross all geographies and segments of the EMC and Tech sectors, including broadband, wireless, the Internet, music,film, television, publishing, advertising, gaming, theme parks, computers and networking, and software. With thousandsof practitioners around the world, we are always close at hand to provide deep industry expertise and resources.
PwCs New Media Group was the first practice of its kind at a Big Four firm. Currently located in New York, Los Angeles,
Boston, Seattle and the Bay Area, our New Media Group includes accounting, tax and consulting professionals who havebroad and deep experience in the three areas that converge to form new media: advanced telecommunications, enablingsoftware and content development/distribution.
Our services include:
Business assurance services
Web audience measurement and advertising delivery auditing and advisory
IAB Measurement Certification Compliance auditing
Privacy policy structuring, attestation and compliance advisory
Mergers & Acquisition assistance
Tax planning and compliance
Capital sourcing and IPO assistance
22October 2014
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PwC
www.pwc.com/e&m
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, PricewaterhouseCoopers LLP, its
members, employees and agents do not 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.
2014 PwC. All rights reserved. PwC and PwC US refer to PricewaterhouseCoopers LLP,
a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers
International Limited, each member firm of which is a separate legal entity. This document is
for general information purposes only, and should not be used as a substitute for consultationwith professional advisors.
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