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TRANSCRIPT
PwC
IAB internet advertising revenue report
2014 full year results
www.pwc.com
www.iab.net
PwC PwC
Agenda
2
April 2015
Survey methodology
2014 full year results
Full year and quarterly trends
Advertising formats
Social media
Pricing models
Industry category spending
Historical advertising growth of media
About PwC
PwC PwC
Survey Methodology
3
April 2015
Survey Scope
The IAB Internet Advertising Revenue Report is part of an ongoing IAB mission to provide an accurate barometer of Internet advertising growth.
To achieve differentiation from existing estimates and accomplish industry-wide acceptance, key aspects of the survey include:
• Obtaining historical data directly from companies generating Internet/online/mobile advertising revenues;
• 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, only releasing aggregate data.
Methodology
Throughout the reporting process, PwC:
• Compiles a database of industry participants selling internet/online and mobile advertising revenues.
• Conducts a quantitative mailing survey with leading industry players, including web publishers, ad networks, commercial online service providers, mobile providers, e-mail providers and other online media companies.
• Acquires supplemental data through the use of publicly disclosed information.
• Requests and compiles several specific data items, including monthly gross commissionable advertising revenue by industry category and transaction.
• Identifies non-participating companies and applies a conservative revenue estimate based on available public sources.
• Analyzes the findings, identifies and reports key trends.
PwC PwC
Annual revenues totaled $49.5 billion in 2014
4
April 2015
Online advertising revenue increased 15.6% in 2014.
In b
illi
on
s $42.78
$49.45
FY 2013 FY 2014Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC 5
April 2015
Annual revenues totaled $49.5 billion in 2014
Online advertising revenue increased 15.6% in 2014.
In b
illi
on
s $42.78
$49.45
FY 2013 FY 2014
15.6%
Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC 6
April 2015
Fourth quarter revenues totaled $14.15 billion in 2014
Revenue in Q4 2014 was 16.9% higher than in Q4 2013.
In b
illi
on
s $12.11
$14.15
Q4 2013 Q4 2014Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC 7
April 2015
Fourth quarter revenues totaled $14.15 billion in 2014
Revenue in Q4 2014 was 16.9% higher than in Q4 2013.
In b
illi
on
s $12.11
$14.15
Q4 2013 Q4 2014
16.9%
Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC 8
April 2015
Strong Growth between Q3 2014 and Q4 2014
Revenue in Q4 2014 was $1.94 billion higher than in Q3 2014.
In b
illi
on
s
$12.21
$14.15
Q3 2014 Q4 2014Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC
Source: IAB Internet Advertising Revenue Report, FY 2014
9
April 2015
Strong Growth between Q3 2014 and Q4 2014
In b
illi
on
s
$12.21
$14.15
Q3 2014 Q4 2014
15.9% Revenue in Q4 2014 was $1.94 billion higher than in Q3 2014.
PwC PwC
Source: IAB Internet Advertising Revenue Report, FY 2014
10
April 2015
Quarterly growth continues upward trend Quarterly growth comparison, 1996–2014
In b
illi
on
s
$14
Q4 2014 revenues crossed $14 billion
for the first time
’97 ’98 ’99 ’09 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’10 ’11 ’12 ’13 ’14 ’96
PwC PwC 11
April 2015
2014 shows record revenues Annual revenue 2005-2014
In b
illi
on
s
12.5
16.9
21.2 23.4 22.7
26.0
31.7
36.6
42.8
49.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total Internet
Source: IAB Internet Advertising Revenue Report, FY 2014 * CAGR: Compound Annual Growth Rate
PwC PwC 12
April 2015
2014 shows record revenues Annual revenue 2005-2014
In b
illi
on
s
12.5 16.9
21.2 23.4 22.7 25.4
30.1 33.2
35.7 37.0
0.6
1.6
3.4
7.1
12.5
12.5
16.9
21.2 23.4 22.7
26.0
31.7
36.6
42.8
49.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mobile
Non-Mobile110% Mobile CAGR
10% Non-mobile CAGR
Source: IAB Internet Advertising Revenue Report, FY 2014 * CAGR: Compound Annual Growth Rate
PwC PwC
$19.0
$2.7 $1.9
$12.5
$3.3
$8.0
$0.8 $1.4
3% 4% 7%
76%
17%
1% 1%
6%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Search Classifieds &Directories
Lead Generation Mobile Digital VideoCommercials
Banners Ads Sponsorship Rich Media
2014 Revenue 2014 vs. 2013 % Growth
Source: IAB Internet Advertising Revenue Report, FY 2014
13
April 2015
Mobile shows the strongest YoY growth Advertising formats – 2014 results and growth rates
In b
illi
on
s
PwC PwC
Source: IAB Internet Advertising Revenue Report, FY 2014
14
April 2015
Historical trends in internet advertising formats Revenue share by major ad formats, 2006–2014
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Search Mobile Banner Classifieds Digital Video LeadGeneration
Rich Media
2006 2007 2008 2009 2010 2011 2012 2013 2014
% o
f to
tal
re
ve
nu
e
PwC
Distributing Mobile across formats demonstrates its importance to Search and Display
38%
27%
10%
25%
Search Display Other Mobile
Formats –2014 (Mobile separated)
15
April 2015 Source: IAB Internet Advertising Revenue Report, FY 2014
PwC
Distributing Mobile across formats demonstrates its importance to Search and Display
38%
27%
10%
25%
Search Display Other Mobile
Formats –2014 (Mobile separated)
Formats –2014 (Mobile included)
16
April 2015
50%
40%
10%
Search Display Other
Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC
Social media demonstrates continued growth Social media ad revenues, 2012 –2014
Source: IAB Internet Advertising Revenue Report, FY 2014
17
April 2015
In b
illi
on
s
* CAGR: Compound Annual Growth Rate
PwC PwC
Source: IAB Internet Advertising Revenue Report, FY 2014
18
April 2015
Performance-based pricing shows slight uptick Internet ad revenues by pricing model, 2013 vs. 2014
Total – $42.8 billion
Total – $49.5 billion
PwC
Historical pricing model trends Internet ad revenues by pricing model, 2005–2014
46% 48%
45%
39% 37%
33% 31% 32% 33% 33%
41%
47%
51%
57% 59%
62% 65% 66% 65% 66%
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 2014
CPM Performance Hybrid
% o
f to
tal
re
ve
nu
e
Note: Pricing model definitions may have changed over the time period depicted both within the survey process and as interpreted by respondents
19
April 2015
Source: IAB Internet Advertising Revenue Report, FY 2014
PwC
4% 5% 5%
7% 6%
9% 9%
12% 13%
21%
4% 5% 5%
6% 7%
8% 9%
12% 13%
21%
EntertainmentPharma &Healthcare
MediaConsumerElectronics &
Computers
ConsumerPackaged
Goods
Leisure TravelTelecomAutoFinancialServices
Retail
FY 2014 FY 2013
Internet ad revenues by major industry category $42.8 B in 2013 vs. $49.5 B in 2014
% o
f to
tal
re
ve
nu
e †
20
April 2015
† Amounts do not total to 100% as minor categories are not displayed.
Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC
Historical advertising growth of media Comparative U.S. advertising media annual ad revenue growth for first 5 years (In billions)
21
$0
$2
$4
$6
$8
$10
$12
$14
Broadcast TV*(1949-52)
Cable TV*(1980-83)
Internet*(1996-99)
Mobile(2010-14)
Year 1 Year 2 Year 3 Year 4 Year 5
110% CAGR
135% CAGR
79% CAGR
69% CAGR
Compound Annual Growth Rate (CAGR)
Sources: IAB/PwC Internet Ad Revenue Report, FY 2014; McCann-Erickson Sources: IAB/PwC Internet Ad Revenue Report, FY 2014; McCann-Erickson
April 2015 *Adjusted for Inflation
PwC PwC October 9, 2013
PwC New Media Group
As business, accounting, and tax advisors to many of the world’s leading Entertainment, Media, and Communications (EMC) and Technology (Tech) companies, PwC (www.pwc.com) has an insider’s view of trends and developments driving the industry. With approximately 1200 practitioners serving EMC and Tech clients in the United States, PwC is deeply committed to providing clients with industry expertise and resources. In recent years, our pioneering work in EMC 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 reaches across 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 thousands of practitioners around the world, we are always close at hand to provide deep industry expertise and resources.
PwC’s 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 have broad and deep experience in the three areas that converge to form new media: advanced telecommunications, enabling software 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
22
April 2015 Source: IAB Internet Advertising Revenue Report, FY 2014
PwC PwC October 9, 2013
For information about our New Media Group, contact one of the following PwC professionals: New York
David Silverman Partner, Assurance Services 646.471.5421 [email protected] York
Russ Sapienza Partner, Advisory Services 646.471.1517 [email protected] Stephanie Faskow Manager, Advisory Services 954.604.1968 [email protected]
23
PwC New Media Group Contacts
April 2015 Source: IAB Internet Advertising Revenue Report, FY 2014
PwC
www.pwc.com/e&m
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