total online advertising spend (...

€30bn net addition to the European online ad market in 10

years…

| 1

6.6 9.2

14.5 15.8 18.8

21.9 24.4

28.6 32.1

36.2

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012 2013 2015 2015

Total online advertising spend (€bn)

Source: IAB Europe for 2011-2015; 2006-2011 retropolated based on IHS growth rates

CAGR (2006-2015):

+20.5%

€30b

n

…in an otherwise flat media advertising market

| 2

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Digital Traditional

Ad spend by category in Europe in 2015 (€bn)

Source: IAB Europe for online and IHS for all other media © 2016 IHS

Online has overtaken TV to become the largest advertising

medium in Europe

| 3

0.7

5.2

7.5

25.5

33.3

36.2

0 5 10 15 20 25 30 35 40

Cinema

Radio

OOH

Print

TV

Online

2015 2014

Ad spend by category in Europe in 2014 and 2015 (€bn)

Source: IAB Europe for online and IHS for all other media

Strong growth across Europe in 2015…

| 4

29

.0%

22

.3%

21

.8%

21

.6%

20

.4%

20

.0%

19

.7%

18

.7%

18

.2%

18

.0%

16

.9%

15

.3%

14

.2%

13

.7%

13

.3%

13

.1%

12

.8%

11

.2%

10

.4%

9.7

%

8.4

%

8.0

%

7.6

%

7.5

%

6.8

%

5.6

%

0%

5%

10%

15%

20%

25%

30%

35%

Irela

nd

Bulg

aria

Pola

nd

Slo

ven

ia

Slo

vakia

Sw

ede

n

Turk

ey

Sw

itze

rla

nd

Cro

atia

Spa

in

UK

No

rwa

y

Russia

Hung

ary

Denm

ark

Euro

pe

Austr

ia

Serb

ia

Italy

Belg

ium

Neth

erla

nds

Fin

land

Fra

nce

Germ

any

Bela

rus

Czech R

ep

ub

lic

Online advertising year-on-year growth in 2015 (%)

Source: IAB Europe and IHS

…at all levels of market maturity and market size

| 5

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

Finland France Germany

Hungary

Ireland

Italy Netherlands

Norway

Poland

Russia

Serbia

Slovenia

Spain

Austria

Belarus

Sweden Switzerland Turkey

UK

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

- 20 40 60 80 100 120 140 160 180 200

Online ad spend per capita (€m)

20

15

ye

ar-

on

-ye

ar

gro

wth

(%

)


Display continues to drive online advertising growth

| 6

14.9%

3.6%

13.0% 11.9%

15.2%

5.8%

10.8% 11.6%

17.4%

4.9%

12.6% 13.1%

0%

5%

10%

15%

20%

Display Classifieds & Directories Paid-for-search Total

2013 2014 2015

Year-on-year growth (%)


Video is an increasingly important part of display

| 7

32

.1%

28

.3%

25

.1%

20

.0%

19

.8%

18

.1%

18

.0%

18

.0%

16

.8%

16

.7%

16

.0%

15

.9%

15

.3%

15

.1%

14

.7%

14

.4%

12

.8%

10

.1%

8.7

%

8.5

%

8.4

%

8.4

%

8.1

%

5.5

%

0%5%

10%15%20%25%30%35%

Bulg

aria

Russia

Sw

itze

rla

nd

Italy

Sw

ede

n

Irela

nd

Belg

ium

UK

Neth

erla

nds

Euro

pe

Fra

nce

Spa

in

Pola

nd

Germ

any

Cro

atia

Austr

ia

Turk

ey

Fin

land

Denm

ark

Hung

ary

Czech R

ep

ub

lic

No

rwa

y

Slo

ven

ia

Bela

rus

Video share of Display in 2015 (%)


€2.3bn

Mobile accounts for a quarter of all European display ad

spend, approaching 50% in most advanced markets

| 8

43

.1%

37

.5%

36

.8%

33

.0%

29

.5%

27

.5%

26

.1%

25

.4%

20

.9%

20

.6%

19

.6%

10

.9%

9.6

%

8.5

%

8.5

%

8.0

%

7.9

%

7.3

%

5.1

%

4.4

%

2.9

%

2.6

%

0%5%

10%15%20%25%30%35%40%45%50%

UK

Irela

nd

Norw

ay

Italy

Neth

erla

nds

Fin

land

Sw

ede

n

Euro

pe

Fra

nce

Pola

nd

Hung

ary

Germ

any

Russia

Cze

ch R

ep

ub

lic

Denm

ark

Serb

ia

Austr

ia

Spa

in

Cro

atia

Turk

ey

Bela

rus

Bulg

aria

2012 2013 2014 2015

Mobile share of Display (%)


€3.5bn

Drivers

• Programmatic and automation

• Proliferation of e- and m-commerce

• Rise of online video consumption

• Growth in premium video inventory – attracting TV budgets

• Improvement in ad quality

• Shift to a mobile-first advertiser mentality

• Social media advertising

• Native advertising

• Sports events in 2016

• Favourable macro-economic climate

Hurdles

• Ad blocking

• Viewability & fraud

• Lack of applied data strategy

• Lack of digital currency

• Fragmentation of ad tech value chain

• Desktop to mobile migration

Macroeconomic environment and adverse

political conditions

• Regulatory uncertainty & restrictions

• Asymmetric competition with US

Drivers and hurdles as reported by local IABs

| 9

© 2015 IHS

Key numbers at a glance

10

€46bn invested in online

advertising

€31bn revenue generated

by publishers

30.4% of all ad revenue

generated online

€22bn direct GVA to EU-28

economy

€113bn GVA to EU-28

economy incl. indirect

effects

€473bn GVA contribution to

EU-28 economy incl.

wider ripple effects

0.9m jobs directly in EU-28

online ad industry

1.4m jobs supported by

wider online ad

industry

5.4m jobs supported if

broader effects taken

into account

© 2015 IHS

Overview of economic impact flows of advertising

11

Audience-relatedeffectsAdvertising-relatedactivities

Skills,Industrydevelopment,R&D,infrastructure,etcSpill-overeffects

Extrajobssupportincreasedconsumerdemandforgoods/servicesacrosstheeconomyInducedeffects

PublishersConsumers

Advertisingservices

Brands

SuppliersSuppliersSuppliers

Adsales AdspendDirecteffects

Indirecteffects

SuppliersSuppliersSuppliers

© 2015 IHS

Indicative estimates of jobs supported by online advertising in EU-28

countries in 2013

12

0.91.4

5.4

0.4%

0.6%

2.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

(b)Advertising

activities-

direct

(c)Advertising

activities-

extended

(d)Overallimpact

%ofEU

employment

Jobs(million)

© 2015 IHS

Indicative estimates of GVA supported by online advertising in EU-28

countries in 2013

13

22 44

288113

473

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0

100

200

300

400

500

(b)Advertising

activities-

direct

(c)Advertising

activities-

extended

(d)Overallimpact

%ofEU

GVA

GVA(€bn)

Digital Advertising in the EU Economy IAA What’s Coming Next, Paris, 15th June

Good news, bad news

Digital economy is top of the agenda in Brussels

Online advertising is under intense regulatory scrutiny

Strong focus on data protection & narrative of tough legal framework => consumer trust => digital economy

Political process can throw up surprising outcomes


Key EU dossiers that will affect online advertising Data protection (GDPR, Cookie Directive, Privacy

Shield) Digital contracts Online platforms Audio-visual media services Directive revision Broad review of consumer protection rules


Data protection

General Data Protection Regulation (GDPR) of 2016 Broad definition of personal data – almost everything!

Arguably narrower legal bases => lack of legal certainty

Consent especially looks problematic – will ads-only model survive?

Fines for non-compliance up to 4% of annual worldwide turnover


Data protection

General Data Protection Regulation (GDPR) of 2016 One-stop-shop (or not!) for enforcement

New transparency requirements

Jurisdictional clarification – anyone targeting or profiling a natural person physically in the EU

Regulation v directive

Regulation will only be applicable as from May 2018


Data protection (cont’d)

ePrivacy Directive (“Cookie Directive”)

Here we go again!

Wider scope than GDPR – includes non-personal data

ePD can be read to make consent the one and only legal basis for online

IAB Europe arguing that cookie rule is no longer needed – minority view for now

DG CNECT clearly taking aim at OBA


Data protection (cont’d)

Safe Harbour / EU – US Privacy Shield

EU Court threw out Safe Harbour in 2015

US and EU Commission have agreed replacement text

Text already challenged on EU side

Commission aiming for sign-off in June

Agreement looks vulnerable to legal challenge

Status of BCRs & Model Clauses unclear


Contracts for the supply of digital content “Full harmonisation” for digital contracts

Introduces novel concept of data as a “counter-performance” comparable to money, with similar remedies

Key issue is physical restitution / giving back of data automatically generated in the course of a contract, including non-personal data

Obligation goes well beyond GDPR, would be disproportionately onerous and technically impossible


Other DSM dossiers - online Platforms, AVMS, review of consumer acquis

Online advertising platforms called out but not regulated – for now

AVMS will extend offline advertising content rules online

Review of consumer acquis may encourage all-up coherence but digital contracts is already on the table


Ad blocking from a policy & regulatory point of view

Ad blocking detection is not illegal!

Urgent need to help policymakers understand how advertising supports media plurality & independence

To get involved, reach out to your national and EU-level trade bodies!


Conjunction of strong regulatory scrutiny and rise of ad blocking must be an opportunity!

Urgent need to help policymakers understand: How digital advertising works What it does and does not entail WRT processing of personal

data How it supports media plurality & independence

Double down on self-regulation – making transparency & control even easier

Op-eds, letters to the EU institutions, blogposts, etc. to educate users, EU & national officials, influencers about value of advertising to EU consumers & citizens


Thank you for your attention.

Daniel Knapp, Senior Director, Advertising, IHS Technology

[email protected]

Townsend Feehan, CEO, IAB Europe

[email protected]

mailto:[email protected]



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