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One in five advertising euros in Europe now spent online

One in five advertising euros in Europe now spent online

One in five advertising euros in Europe now spent online

Europe’s online market grew 14.5pc year-on-year and is now valued at €20.9bn. By comparison, the overall European advertising market – excluding online – grew at just 0.8pc.

According to IAB Europe's annual AdEx Benchmark survey, one in five advertising euros in Europe is now spent online.

Video is commanding a significant and growing share of spend with sound and measurable results.

The explosion of big data is also enhancing targeted advertising capabilities and improving monetisation of publishers' inventory.

Advertisers are also more open to shifting big ad budget from mature to emerging markets, a movement no doubt fuelling the online economy.

The return on investment (ROI)-centric search format enjoyed the highest growth rate of 17.9pc in 2011. However, newer formats including video and mobile helped lift the value of display ad spend, coming a close second at 15.3pc.

Video's rising star

Video's ability to convey brand messages in a narrative makes it attractive to the big-spend advertisers who have a strong legacy in telling stories through TV, the classic branding medium since the age of Mad Men.

AdEx Benchmark 2011 includes online video advertising figures for 14 markets, where video represents 8.2pc of the total online display market value. It ranges from its highest at 9.8pc in Sweden but is also gaining traction in CEE markets as 5.8pc in Poland indicates.

In Germany and the UK, video has already crossed the €100m threshold. In the UK, the market is worth €126m; in Germany €117m.

Mobile ad spend is growing rapidly

While mobile advertising is still a nascent format with mobile display spend contributing 1-3pc of online display ad spend, it is growing rapidly. The nine markets that reported mobile display advertising for both 2010 and 2011 recorded an average growth rate of 45.6pc.

Paid-search continued to grow double-digit at 17.9pc in 2011 and as such it remains the biggest format in online advertising. Search accounts for 46.5pc of total online advertising spend compared with 33.6pc for display and 19.2pc for classifieds and directories.

With a 15.3pc growth, display advertising continued its 2010 renaissance, driven both by the recognition of online display as branding medium and the explosion of the big data economy.

Big data's bigger impact

Big data relies on the rich metrics received through the online medium to plan display advertising. Using ad exchanges, real-time bidding and algorithmic trading, advertisers can reach both broad and niche audiences that meet their exacting criteria.

These data-driven techniques increase the cost-efficiency of online advertising, maximising cheaper, remnant inventory to reach consumers. Search advertising has led the way in this data-driven approach and has enjoyed explosive growth across Europe.

“Innovation and diversity have driven the outstanding growth of the European online advertising sector, which now accounts for more than 20pc of total advertising spend," Alain Heureux, president and CEO of IAB Europe, explained.

“With one in every five advertising euros in Europe being invested in the online medium, it's clearly a vital part of the region's economy."

Digital marketing image via Shutterstock

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