h1 2009 uk online adspend study agenda 1.introduction 2.study methodology 3.market background and...

H1 2009 UK online adspend study

Agenda

1. Introduction

2. Study methodology

3. Market background and trends

4. UK online adspend – headline results

5. Online in context

6. The digital media mix

7. Industry categories

8. Summary

9. Looking ahead…

10. 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

• The IAB has been working with PwC since 1997 to 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 the industry standard for measuring advertising spend

• 135 companies have participated in the survey

• Reported figures are not adjusted to account for other organisations that have not participated

• Total advertising revenue is reported on a gross basis

• The figures are drawn up on the basis of site declaration

• They cover thousands of UK websites, but by no means all

A brief history…

Research participantsAbsolute Radio Accelerator Acxiom Ad2-one Adept Scientific AdLINK Ad Pepper Ad Revenue AdSales4U Affiliate Window Affiliate Future AOL Ask Associated Northcliffe Digital Autotrader Bauer BBC Worldwide Bloomberg Blue Lithium BMJ Bolt Blue Bounty BSkyB Buy Association Buy.at (Perfiliate) Channel 4 Chinwag Chrysalis Radio Classic FM CNET Conde Nast Confetti

Commission Junction Dennis Interactive DGM Drive PM Dixons Double Fusion E-circle Economist EDR E-Type Euroclick Everyclick Exchange and Mart .Fox Faversham House Group Financial Times Find.co.uk Findaproperty Fish4 Five Flirtomatic Friends Reunited Future Publishing Fox

Networks GCap Radio Glam Media Global Radio Interactive Google Guardian Habbo IDS Hachette Fillpacchi Handbag Haymarket Hello IDG Independent I.E.T (Institute of Engineering and

Technology) IPC Media IPT i-Points Is4Profit ITN ITV iVillage Jetix Jobs.ac.uk Jobsite Johnston Press Last FM Loot Lycos Manchester Online Media Brokers Memedia Miva Moneyextra Monster MSN My Space National Magazines Net Communities Netrecruit News International Online Media Group Orange Oridian Overture Pigsback Platform A Prime Location Property Finder Real Media

Reed Business Information Reuters Right Move Scotland Online Sift Simply Media TV Specific Media SRH Skupe Teamtalk Telegraph Tesco Tiscali TMN Media Tradedoubler Trinity Mirror UK

Net Guides UKTV Unanimis Upmystreet U Target Valueclick Viacom Brand Solutions Vibrant Virgin Media Webgains Wallpaper* WME WebTV Workthing Yahoo! Yahoo! Networks Yell

…Plus further recruitment sites, courtesy of WARC

Representing thousands of UK websites

3. Market background

and trends

Worst since Great Depression?

Worst recession since the Great Depression…

Marketing budgets marked down again in Q1 09

Marketing budgets cut at slower rate in Q2 09

Group M +2%

Enders 0%

Outlook for 2009 online forecasts *

* As at March 2009.* As at March 2009.

UK economy resumes..

Green shoots appearing

Where were we this time last year?..

• H1 2008 was a landmark year for online with ad

spend reaching £1.669.6 billion for the half year

• The medium grew by 21% from £1.334 billion in 2007

• Online was 18.7% market share

• Our 2009 H1 forecast was flat or minimal growth for online

Number of internet users* in the UK

Source: NRS UKOM: Jul-Dec 2008; Jan – June 2009; *adults using the internet at least once in the last 12 months

71%

UK Pop

73%

UK Pop 44%

Online

Pop

49%

Online

Pop

Internet users going online

more than once a dayNumber of people online

44%

online

pop

49%

online

pop

Continuous growth in online audiences and broadband penetration

% B

road

band

acc

ess

at h

ome

Onl

ine

audi

ence

(m

illio

ns)

Source: BMRB Internet Monitor

Majority of broadband services are now above 2 MB

Re-Based: All Internet users aged 15+ who know their broadband connection speedSource: BMRB Internet Monitor May 2007; May 2008; May 2009

56% of home broadband users have used wireless broadband at home in the last month (May 2009)

Weekdays

Saturdays Sundays

Source: BMRB Internet Monitor, May 2009 Base: All Internet users aged 15+

Online second only to TV% of media time for all internet users

4. UK Online Adspend Study

Results for the half year to June 2009Prepared by

PricewaterhouseCoopers for the IAB

£1,759.6mmarket in H1 2009

An increase of £90.1m year-on-year

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

4.6% increase

H1 2009 vs. H1 2008

on a like for like basis

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

Online advertising reaches record £924m in Q1 2009£

mill

ions

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

‘01 ‘03‘02 ‘04 ‘05 ‘06 ‘07 ‘08

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

The Big news in

World Media is….

The Big news in

World Media is….

Online Spend has Online Spend has

Overtaken TV!Overtaken TV!

Online Spend has Online Spend has

Overtaken TV!Overtaken TV!The UK is the first major economy

to achieve this feat

The UK is the first major economy

to achieve this feat

The biggest news in media

% share of revenues for January to June 2009

Total advertisingmarket

£7.520bn

H1 2009 market share 23.4% (18.7% in H1 2008)

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

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.

Total advertising market growth = -16.0%

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

Online only medium showing growth in H1 2009

Year on year growth for H1 2009

Mar

ket

Sha

re

Online’s share growth accelerates to 23.4%

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

From the smallest to the largest in 6 years£

mill

ions

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

N.B. WARC Recruitment data included from 2003

Radio

Outdoor

Internet

Press - Display

Television

Press - Classified

Direct Mail

Online overtaken Press Display and TV

£7.520bn

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

Half year 2009

Directories are estimated

Summary – H1 2009

• Online advertising is the only medium showing growth in H1 2009

• Internet advertising reaches £1,759.6m in H1 2009

• Online achieved a share of 23.4%, up nearly 5 points from H1 2008 (18.7%)

• The market grew on a like for like basis by 4.6% year-on-year, still maintaining strong growth

• Online is the largest media in the UK for H1 2009

6. The digital media mixThe developing mix of ad products

19.0%

19.3%61.7%

Display

Classifieds

Paid for search

Solus Email

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

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.

Half year total

£1,759.6m

% share of revenues for H1 2009

The digital media mix

£ m

illio

ns

0.2% -2.5%

+10.6%

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

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.

The digital media mix

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.

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

Year on year comparison

Strong growth of Search continues

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

Growth in further classifieds from H1 2009

Classifieds led by key players

Display: formats still dominated by banners & rich media

£m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

The display digital media mix

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

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.

Half year display total

£334.6m

% share of display revenues for the half year to June 2009

£237.9m

£6.7m

£9.2m

£7.2m

£11.4m

£30.8m

£18.2m

£13.2m

Formats summary – H1 2009

• With revenues of £1,085.4 m in H1 2009, search maintained its dominant position

• YoY, display was flat (0.21%) at £334.6m while search increased by 10.6% and classifieds were down by -2.5% to £339.7m

• Video pre and post roll saw growth of 196%, and display affiliate grew by 111%

• Classifieds: recruitment declined by -31.8% to £123.6m and other classifieds grew by 29% to £216.0m

Source: Internet Advertising Bureau / PricewaterhouseCoopers

7. Industry categories

Display Sector Market Shares

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 85.5% of online revenues in H1 2009.

*

Source: PricewaterhouseCoopers / Internet Advertising Bureau / WARC

Based on 86% of total display ad spend revenues

• Technology is the largest category with 19%,

however Telecoms has shown the largest share point growth (+3.6 points)

• Finance and Entertainment & Media are third and fourth respectively

• Consumer Goods has grown almost 2 share points to 8.1%.

Industry sectors summary – H1 2009

8. Summary

Summary

• Online ad spend grows by 4.6% year-on-year (on a like for like) to reach £1,759.6m in H1 2009

• Online achieved a share of 23.4%, making it the largest advertising format in the UK

• Online now ahead of TV and Press Display

• 23.4% of all advertising budgets are now spent online

• Nearly £1 in every £4 of ad spend goes online

Summary

• Search experienced strong growth of 10.6%

• Classified declined slightly by -2.5% in H1 2009 (Recruitment Classifieds declined dramatically by -32%)

• Display (0.2%) had a very good year during difficult trading conditions

• Technology takes the top spot for display at 19.1%

• Telecoms (13.3%) and Finance (13.2%) take second and third positions.

9. Looking ahead

2009 and beyond

• Tough market in Q3, but could pick up during the run up to Christmas.

• 2010 set to be challenging for the media market, but online should see modest single figure growth.

A point in history…

Today’s News

“It’s a point in history. It marks a point when

things aren’t going to go back to the way they

were. The technology and media

fragmentation is not going to stop”

Financial Times 30.9.09

All of the 135 companies who have taken part, representing thousands of websites

and to

Our thanks to…

Paul Rosen – Senior Associateand

Eva Berg-Winters - Senior Manager

Colin Macleod, Research Director

10. Questions

For more information

info@iabuk.net

020 70506953