Interactive Advertising Bureau

The political deal struck on Europe’s future data protection law is bad news for consumers and for businesses. IAB Europe raises concerns about the political agreement on Europe’s future data protection law.

European institutions have been quick to call the deal on Europe’s future data protection law ‘a major step towards a Digital Single Market’, or claim that Europeans will continue to be able to ‘enjoy all the services and opportunities of a Digital Single Market.’

“The data protection deal is a triumph of populist rhetoric over common sense.” said Townsend Feehan, CEO of IAB Europe. “On the Internet, as elsewhere in life, there is no such thing as a free lunch. The value that EU consumers are currently able enjoy in the form of free or low-cost online services needs to be paid for somehow.”

The new law fails to recognise that not all data are the same. This threatens Europe’s vibrant online advertising industry because it raises serious concerns about the possibility for companies to continue processing low-risk pseudonymous data. Advertising is the growth engine of the Internet, funding the majority of media and services that EU citizens have access to at little or no cost today.

“This will hurt European media already reeling from their transition to digital,” said Allan Sørensen, IAB Europe board member. “Weakening the effectiveness of online media’s main source of income will also inevitably undermine media plurality and media independence in Europe.”

The agreed text is full of legal uncertainty, red tape and restrictions which will have the exact opposite result of making Europe ‘fit for the digital age’, as the supporters of the privacy deal struck yesterday claim they aim to do. Instead it will limit feasible business models and reduce the availability of information and services on the Internet.

“Legal uncertainty and big fines are a toxic cocktail, companies will have little choice but to impose annoying requests for consent every time a user accesses their website. Europe remains a regulatory minefield which means that new data-driven innovative services and products will continue to come to European consumers much later or not at all, and if they come they will be offered by more competitive companies.”

For more information, please contact Townsend Feehan (feehan@iabeurope.eu, tel. +32 478 275 074) or Allan Sørensen, IAB Europe board member and spokesperson on data protection issues for IAB Europe’s Policy Committee (as@danskemedier.dk, tel. +45 3397 4281).

The Interactive Advertising Bureau Europe (IAB Europe) welcomes the opportunity to provide feedback on the European Commission’s public consultation on the Directive 2010/13/EU on Audiovisual Media Services (AVMSD).

IAB Europe is the voice of digital business. Its mission is to protect, prove, promote and professionalise Europe's online advertising, media, market research and analytics industries. Together with its members – companies and national trade associations – IAB Europe represents over 5,500 organisations. Advertising is essential to the success of the European digital market. It has a key role in helping fund digital content, services and applications, making them widely available at little or no cost, as well as driving growth in the digital sector.

Digital advertising is a major lever for a successful digital economy. In 2006, the value of the EU market stood at €6.6 billion, versus €30.7 billion in 2014. This is an increase in spend of €24.1 billion and translates into a compound annual growth rate of 21.2%, or an average €3.0 billion per year. With a growth rate of 11.8% in 2014 compared to a 1.3% increase in overall EU GDP, the digital advertising sector continues to outperform the overall EU economy .

IAB Europe welcomes the Commission’s initiative and aim to make Europe's audiovisual media landscape fit for purpose in the digital age. Such an initiative must pursue the joint objectives of serving European consumers as well as supporting the development of the digital economy and new business models.

IAB Europe is limiting its response to questions that contain aspects which could bring opportunities or pose challenges to the European online sector and online advertising industries.

Online advertising grew 9.7% on a like-for-like basis to a value of €16bn for the first half of 2015 from €14.6bn in H1 2014 and is expected to reach almost €34bn for the full year.

IAB Europe, in collaboration with IHS Technology, has today published the first ever AdEx Benchmark H1 2015 report1. The report reveals that online advertising grew 9.7% on a like-for-like basis to a value of €16bn for the first half of 2015 from €14.6bn in H1 2014 and is expected to reach almost €34bn for the full year.

The H1 2015 report reveals that CEE helped to drive the growth with a double-digit increase of 12.9% whilst the more mature markets in Western Europe also experienced a growth of 9.3%.

Display advertising now accounts for €5.6bn of all online advertising spend with a growth rate of 13.0% and indeed in Western Europe display experienced a 12.6% growth, the highest of all formats, suggesting an improvement in targeting, formats and data strategies for brand advertising.

Mobile continues to takes a more central role in consumer’s lives and 61% of European consumers now use a smartphone2. It is no surprise then that mobile display advertising spend increased 57.5% surpassing the €1bn in the first half of this year and accounting for 24% of all display advertising. Video also continues to flourish surpassing the €1bn mark as publishers develop their video monetisation strategies.

The report is a comprehensive perspective of online advertising spend across Europe which is growing ever more essential in the light of European policy formulation, attracting global start-up funding, benchmarking market development trends, the increasingly pan-regional nature of digital advertising investments and the role of Europe’s digital economy in a global context.

Townsend Feehan, CEO of IAB Europe said, “This new half yearly AdEx Benchmark reports reveals that formats which enable marketers to deliver digital brand campaigns at scale are the high-growth areas. As an industry body we continue to work with our members to invest in research, develop standards and guidelines, and deliver education to increase knowledge and best practice in digital advertising.”

Daniel Knapp, Senior Director of Advertising Research at IHS Technology and author of the research, said, "The AdEx Benchmark H1 2015 research highlights the rapid innovation of the online advertising industry. The acceleration of the display growth rate to 12.6%, particularly in mature markets where online is already the largest advertising medium, shows that advancements in mobile, video and advertising technology are driving the online ad market. We expect H2 2015 to perform better than H1 and online to lift an otherwise flat European advertising market.”

IAB Europe members can download the report by logging into the IAB Europe website. Non-members can request the report by contacting: adex@iabeurope.eu

IAB Europe
Rond-Point Robert
Schuman 11
1040 Brussels
Belgium
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