Last week, IAB Europe, the leading European-level industry association for the digital marketing and advertising ecosystem, released its full 2018 AdEx Benchmark Report. The report, now in its thirteenth year, is the definitive guide to advertising expenditure in Europe, with this study covering 28 markets.
First published in MARTECHSERIES, the Marketing Technologist Insights publication, IAB Europe share some commentary about the growth figures released in 2018 and cast predictions and rationale for 2019 stats.
31 July 2019, The European Digital Advertising Market Continues on Its Growth Trajectory
This July, IAB Europe published the latest edition of its AdEx Benchmark report, which provides facts and figures about the health of the region’s Digital Advertising market in 2018. Since 2008, the study has mapped a trend of sustained double-digit growth. However, as 2018 got underway it was far from certain this trend would continue.
Indeed, for the first half of the year, the market showed all the signs of a slowdown. At that point, based on local market signals, we were forecasting that total growth for the year would be 12% on an annual basis – somewhat lower than had been achieved in 2017. This dip in activity in part relates to the introduction of the EU’s General Data Protection Regulation (GDPR), which came into force on the 15th of May. Uncertainty over how GDPR would play out meant that media buyers temporarily put the budget on hold while they took stock of the situation.
The market bounces back
This period of uncertainty is unsurprising and as you would expect in the context of such a game-changing regulation. What was unexpected, however, is just how quickly the market rebounded. The final figures for 2018 show that the Digital Advertising industry in Europe grew by 13.9% – the fastest growth rate the sector has experienced since 2011. Significantly, growth is reflected across all European markets; suggesting that Europe represents a common advertising market fuelled by similar growth drivers.
In financial terms, the European advertising market grew from €48.4 billion in 2017 to €55.1 billion last year. This increase suggests continued demand for Digital Advertising and at least partial adaptation to regulatory challenges. However, we expect that the full impact of GDPR won’t be realized until this year or next.
Overall, despite fundamental structural changes in the market over the past years, growth has been consistent since 2011 – varying only by a maximum of 2.4 percentage points. The growth drivers were the ‘usual suspects’: video, mobile, social, and programmatic. However, while in 2017 the market was flat once social was factored out, growth excluding social picked up in 2018. This suggests that amidst flat and declining parts of the industry, there are new pockets of growth.
A more diverse future
We expect growth to remain double-digit in 2019, but to slow down slightly to approximately 11% year-on-year. Sources of growth are diversifying as digital out-of-home becomes connected to the programmatic ecosystem and audio achieves scale through standardization, partnerships and an explosion in monetizable inventory. However, this growth is coming from a low base. It will take another five years before it can make a significant contribution to the overall spend.
In programmatic, a renewed focus on private marketplaces by media buyers highlights a growing realization that audience-based buying still needs context. This presents an opportunity for premium editorial environments. We also see a new generation of programmatic services built on top of the available infrastructure. Services like supply path optimization (SPO) provide new tools to spot inefficiencies and optimize the supply path, and dynamic creative solutions will deliver new use cases for a programmatic infrastructure.
Blurring boundaries between AdTech and MarTech enable new ways of activating companies’ customer base and first-party data. Today, organizations are increasingly looking to embrace metrics and KPIs that are outcome-oriented, and they increasingly want to move beyond proxy metrics for campaign success and measure media investment as close to business metrics as possible. The marriage of AdTech and MarTech provides a path for this.
At the same time, a new sense of ‘data realism’ is developing among some of the savviest brands. These organizations understand that data can’t solve everything and not all that can be measured and quantified matters. These brands eschew short-term metrics and the performance notion of advertising in favor of creative or design-led approaches. For some, this entails moving emphasis from paid media to experience design, such as app development, customer care, logistics, and other consumer-centric features.
Connected TV also has potential, and it continues to be a hot topic. However, the landscape is much more localized and fragmented in Europe than in the US, where a lot of the growth narrative comes from. More standardization and collaboration between market participants is required if it is to live up to its full promise.
Author: Phil Sumner, Global Media Insights Director, Teads and IAB Europe Board member
Digital advertising spend has not experienced a decline since IAB Europe started producing the AdEx Benchmark Report back in 2006. That was one of the opening remarks made by Daniel Knapp, IAB Europe Chief Economist, when he presented the 2018 study findings at this year’s IAB Europe Interact conference in Warsaw (see video of Daniel’s presentation here). This fact is even more remarkable given that since 2006, we’ve been through a double dip recession.
Furthermore, 2018 saw the highest growth for 7 years. This comes in the backdrop of falling regional wide consumer confidence, the rise of Zero Based Budgeting in some of the largest advertisers and the backdrop of GDPR. Now the digital advertising industry has grown to €55bn (incidentally roughly the size of Lebanon’s GDP), we have a lot to be optimistic about and we should be proud about the value, innovation and jobs we’ve created across the region.
But beyond all the good news, it makes sense to reflect and put our current ‘purple patch’ in a context of a wider timeframe and what this may mean in the future. During Daniel’s presentation, I furiously wrote down some thoughts, questions and challenges which I’ve attempted to condense to 4 broad sections below.
1) Post Global Financial Crisis realignment is still taking place 10 years hence, and we should learn the lessons
Leading up to 2007, almost 50% of marketers’ spend was spent on display (both traditional and video) whilst only 37% was spent on search. By 2009 - post Global Financial Crisis - this balance was reversed. This was a massive shift and one that was probably underplayed in the years of the aftermath. Since then, gradual realignment has been taking place and display advertising is almost back to parity with search. This can be accounted for - in part - by new branding spend entering into display formats and also display’s growing performance credentials. But moreover, marketers are just sensibly rebalancing spend between formats.
So why is this interesting? I think it well-represents both how the buying pattern changed in times of crisis, but also how it could change again when a shock (undoubtedly) occurs. If the industry shifted back to the proportions observed in 2009, that would mean €6.3bn shifting out of display into search. Search offers an instant gratification, feedback and impressive looking numbers but it’s also a terrible branding channel. In times of recession, brands should be spending more to protect their brand not neglect it. The work of Binet and Field emphasises the 60/40 rule; that 60% of ad spend should be on long term branding and 40% on shorter term activation (and incidentally this is based on some of the most robust and credible empirical evidence I’ve ever seen). Where I believe and hope things would be different today relate to measurement and transparency. The display market is far less opaque than it was in 2008. Viewability, brand safety and fraud protection are table stakes for the credible end of the market at least and those who have best-embraced transparency will be the players that are best set to weather any headwinds.
2) The UK continues to be a regional digital primate but why?
I often get asked why the UK ad market is so much larger than other countries and Daniel addressed this, to an extent, during his session. As I see it, there are two predominant reasons for this. Firstly, overall ad spend as a proportion of GDP in the UK has always been one of the highest globally along with markets like Australia and the US. So as a nation, the Brits already have a cultural affinity to advertising and an economy set up to fuel it. Furthermore, according to Enders Analysis, the UK online advertising market is the biggest in relation to GDP in the world at 0.63%. Likewise, ecommerce spend per person is one of the highest in the world too. Due to this, the UK has become an online powerhouse and developed a huge tech sector in the backdrop of comparatively low regulation so it simply has all of the prerequisites to allow the digital advertising market to flourish. But the results do need to be looked at objectively. Collection and harmonization is a huge task and reliant predominantly on the data released and collected by national IABs. As the most advanced market in the region, the definitions used in the UK to define online advertising are wider and more all-encompassing than other markets where definitions could be considered more restricted. So, comparative results need to be viewed through this lens and not just taken on face value.
3) We need to shout about the importance of Outstream in protecting quality journalism
This year’s data underlined the importance of the Outstream format. Over the last year there was €3.5bn new spend coming in to the industry via display, with video being the biggest contributor to this. In fact, video grew over 30% in 2018. Within video, Outstream grew at a phenomenal 45% and will take over as the predominant source of video revenue in our industry in 2019. The rise of Outstream has been such an obvious success story because it’s a true positive sum game for the digital advertising industry. Publishers of quality respected editorial content but who lacked primary video content, struggled to tap into video ad revenues. Thus the industry remained massively undersupplied. Outstream has allowed them to do this; to increase their yields whilst not forcing an interruptive ad unit on their audiences. As the online publisher marketplace has matured, sustainable commercial models have been developed so that the likes of The Guardian and MailOnline are all posting profits - not something that was taken for granted just 5 or so years ago. Outstream is now a core part of those revenue strategies and the growth we are seeing reflects the ever increasing confidence in the results it can deliver.
4) When this period of growth has ended...what next?
It is an inevitability that this period of growth will slow as our industry matures. If you take the view (which I broadly do) that we are just playing catch up to allocate budgets to align with consumers’ time on screen then, as we reach this equilibrium, growth will slow down. At that point, fortunes will broadly follow the wider economy (on the assumption and previous evidence that the ad market is a bellwether for the wider economy).
So, where do we look to for growth when we reach this point?
I believe that we should be looking to tap into trade marketing budgets. Not everyone agrees with me on this point. I recently saw the EMEA MD of GroupM specify that he didn’t see that as a big opportunity for growth. I politely disagree with him on this point and my logic is this; global trade spend is circa $1T (according to Nielsen). That’s almost 4x the size of the global ad market ($283bn - according to eMarketer). This is a huge pool to tap into and winning just a small fraction of this could be game changing. Given that many brands are over-leveraged on price and promotion, the increasing evidence that this is a poor strategy for long term growth (look no further than Byron Sharpe), and the ability of mobile devices to deliver highly relevant advertising, we should have these pots in our crosshairs.
Access the 2018 AdEx Benchmark Report here.
Last week, IAB Europe, the leading European-level industry association for the digital marketing and advertising ecosystem, released its full 2018 AdEx Benchmark Report. The report, now in its thirteenth year, is the definitive guide to advertising expenditure in Europe, with this study covering 28 markets.
First published for PerformanceIN, The AdEx Benchmark report author, Dr Daniel Knapp, chief economist at IAB Europe shares a broad market overview of the study's key findings with a detailed focus on the search results, across mobile and desktop.
29 July 2019, The European Paid-For Search Market: Stable Growth, but Structural Transformation Ahead
The AdEx Benchmark report author, Dr Daniel Knapp, chief economist at IAB Europe shares a broad market overview of the study's key findings with a detailed focus on the search results, across mobile and desktop.
Every year, the IAB Europe, a European-level industry association for the digital advertising and marketing ecosystem, publishes its AdEx Benchmark report. The report outlines the performance of the European digital advertising market and breaks down growth figures by both format and region. This July, IAB Europe released the latest edition of the study, which covers performance over 2018.
Looking first at Europe’s overall digital advertising sector, the story that emerges from the report is one of sustained growth. By the end of 2018, the total market had grown to €55.1 billion from €48.4 billion in 2017, an increase of 13.9% and the fastest the market has grown since 2011. From 2012 to 2018 the market has more than doubled in size driven largely by increasing advertising investments in social, mobile and video formats. Overall, since the first AdEx Benchmark study in 2006, the market added some €48.5 billion in annual value.
Figure 2: total digital ad spend growth
For some years now, paid-for search has been an important growth driver. In 2009, for example, it was the only medium in Europe not to fall into decline as a result of the recession, largely due to its ability to measure and pay by performance.
This resilience has been highlighted by ten years of like for like growth figures in the category. Indeed, of all the advertising formats that IAB Europe tracks in its AdEx Benchmark study, paid-for search has maintained the strongest growth rates in periods of economic uncertainty. Where other marketing spend gets cut when times are tough, the pay-by-performance model allows marketers stricter budget controls, and low entry costs enable tactical marketing interventions.
In 2018, despite the maturity of the format, growth in paid-for search continued in double-digit figures (12.5%) enabling it to maintain its total share of the European digital advertising market at 45%.
However, this growth was not spread evenly across Europe. At the top end, the paid-for search market in Belarus grew by 37.5% while at the bottom end, Belgium’s market grew by 1.9%. The top six markets in terms of growth are located in Central and Eastern Europe, while Finland (20.7%), Ireland (16.7%) Norway (15.9%) and Sweden (14.5%) are among the fastest-growing search markets in Western Europe.
Nordic markets have a strong local history of directories spend, which delayed the proliferation of the paid-for search market in the mid and late 2000s. The higher growth rates in the region are due to those historical reasons. The UK is the largest paid-for search market in Europe and still grew above the European average (14.3%).
Figure 33: paid-for search growth in 2018
One of the reasons that the paid-for search market is seeing strong growth is because prices for mobile search are beginning to catch up with desktop search prices. While the share of mobile searches is still roughly 10% higher than the share of mobile ad spend, the gap is shrinking. What’s more, mobile search has benefitted from an increase in mobile search volumes overall, helped by better integration with maps and changing consumer habits.
Figure 35: mobile search ad spend and growth
As a result, in 2018 mobile search grew by 28.6% to €11.6 billion and increased its share of the total search market by 5.8 percentage points. Once again, the growth leaders are Central and Eastern European nations such as the Czech Republic (70.6%), Belarus (54.4%), Ukraine (44%) and Slovenia (43.8%). Norway (35%) is the fastest-growing Western European market. The UK, which is by far the largest mobile search market (worth €4,646 million compared to the €1,313 million generated by Germany, the second-largest market) is growing in line with the European average.
Additionally, eight markets can now be considered mobile-first, in that their mobile share of search exceeds 50%. Five markets have a mobile share larger than 60%: Serbia, Ukraine, Russia, Turkey and Ireland.
Figure 37: mobile share of paid-for ad spend by market in 2018
The nature of search itself is transforming. One of the biggest changes is the rise of Amazon, which is becoming a default destination for product-related searches. Mobile, and in particular app-based media consumption, are leading to a further verticalisation of the search market. Verticalisation means that consumers conduct search in specific functional apps - such as travel or entertainment - not all of which is paid for. At the same time, new opportunities to monetise mobile search arise, in particular through maps and in-car integrations.
Often, voice is highlighted as the next generation of search. Yet there still is a lack of systematic evidence that consumers are adopting voice to conduct diverse, and more complex search queries beyond daily, habitual tasks (checking the weather, for example). Monetising voice search also remains a challenge, both from a product and a privacy perspective.
In sum, these observations suggest that the future of search is defined by a more diverse set of factors than before. This will change how we define, buy and use paid-for search.
Last week, IAB Europe, the leading European-level industry association for the digital marketing and advertising ecosystem, released its full 2018 AdEx Benchmark Report. The report, now in its thirteenth year, is the definitive guide to advertising expenditure in Europe, with this study covering 28 markets.
First published in Mobile Marketing Magazine, The AdEx Benchmark report author, Dr Daniel Knapp, chief economist at IAB Europe provides insight into the state of the European mobile advertising market on the back of the report.
25 July, 2019, Mobile continues to drive growth in European digital advertising
This July, IAB Europe published the latest edition of its annual AdEx Benchmark report on the state of the European digital advertising market. The report, which focuses on market performance over 2018, brings together facts and figures from across Europe relating to growth, and delivers a breakdown of spend across digital advertising formats.
The top-line figures for the overall market show that the entire European digital advertising sector grew by 13.9 per cent in 2018, which represents the fastest growth in the sector since 2011. Digital remains a significant driver for growth in the overall paid-media advertising market and now accounts for 45 per cent of the total. Between inception of the AdEx Benchmark study in 2006 and this year’s index, the market added €48.5bn in annual value.
Mobile increases market share of display
Where does mobile advertising fit into this picture? Mobile advertising first made a truly significant impact on the digital advertising market back in 2013, when it accounted for a double-digit share of digital spend for the first time. By 2017, mobile was one of the key drivers behind growth in display spend.
In 2018, mobile continued to drive growth. Overall, mobile display advertising spend grew by 34.2% to reach €11.4bn. This growth means that mobile accounted for 48.9 per cent of total spend in display advertising.
The strong performance of mobile display is in contrast to desktop display, whose share dropped to 51.1 per cent in 2018 from 57.2 per cent in 2017.
The growth of mobile display is largely due to the continued proliferation of social media and improved targeting options. The growth in optimised mobile pages from publishers has also played a part, as has the use of ad campaigns to drive app installs. Gaming apps were a particularly strong driver for growth in mobile display and we saw large gains recorded by app developers in this space.
Looking at the regional breakdown, the growth leaders are mostly emerging markets such as the Czech Republic (105 per cent) and Ukraine (65 per cent). However, Germany also demonstrated a surge in mobile display growth, coming second in the rankings at 65.4 per cent. Overall, mobile display spend is dominated by Western European countries, particularly the UK, which accounts for €4,759m of the total (almost four times as much as the second biggest spender, Italy, which accounted for €1,051m). Of note is the fact that 13 markets are now mobile-first (i.e. the share of spend on mobile exceeds that of desktop).
Mobile search spend trends upwards
Mobile also performed well in the search space, growing 28.6 per cent in the year to total €11.6bn. This represents an increase of market share of 5.8 per cent on 2017 (40.5 per cent vs. 46.3 per cent), bringing it closer to spend on desktop search. While this is a lower share of the market than in mobile display, it accounts for €0.2bn more in actual spend due to the larger size of the market.
Higher ad rates were a driver of growth in this market. This is significant because historically rates for mobile search have lagged those for desktop. And while the share of mobile spend still trails the share of mobile searches by around 10 per cent, the gap is closing. Mobile search also benefited from higher mobile search volumes overall, helped by better integration with maps and changing consumer habits.
In this category, nine of the ten largest markets are in Western Europe (with the exception of Russia, which ranks fourth). The fastest-growing markets are once again in Eastern Europe, with the Czech Republic (70.6 per cent), Belarus (54.4 per cent) and Ukraine (44 per cent) leading the pack. Eight markets are now mobile-first (i.e. where spend on mobile has overtaken desktop), with the top ten in terms of mobile share coming from a mix of Western and Eastern European nations.
Across all formats, mobile ad spend is still catching up to changed media consumption habits, especially outside of the social platforms. As the social share of digital ad spend begins to plateau, this is where new pockets of growth are emerging. The ascent of digital audio advertising around music streaming and podcasts, is also predominantly mobile. This will be further fuelled by the proliferation of connected cars in the years ahead.
IAB Europe’s new Economic Trends Forum kicked off on 25 July with a deep dive into the trends defining the digital advertising industry. Our Chief Economist, Dr. Daniel Knapp provided a fascinating insight into the macro-economic environment, market conditions, formats and structural change across the European landscape. He also took questions from members as part of the session to help fuel further engagement and member interaction. You can listen to the recording below to get up to speed on the latest developments!
IAB Europe’s Economic Trends Forum offers market analysis and industry insights for our corporate members and network of National IABs. Every 8 weeks, a webinar or face to face event will be hosted. Free for members to attend, each forum will focus on a different industry topic with a detailed analysis of the marketplace.
The next Economic Trends Forum focus on digital audio advertising will take place on 18 September in Paris - registrations will open shortly.
If you are a member, please log in and click below to watch the recording and download the deck:
This week, IAB Europe member Sublime announced the results of its research into campaign efficiency versus exposure frequency, and found the less time a consumer is exposed to an ad campaign, the more effective it is for brand recall.
The research studies, which were conducted with several of Sublime’s advertisers, evaluated the benefits of capping unique impressions on a campaign, to understand the point at which exposure repetition has a negative effect on branding performance.
Cap Brand Exposure at Three Views
Sublime’s research found spontaneous brand awareness increased +6% when the consumer was exposed to an ad two to three times, while more than four exposures proved less efficient with a -3% rate in awareness. With aided brand awareness the research found only one exposure was sufficient (+8%) in contrast to a -23% awareness rate which occurred when the consumer was exposed to the ad 10 or more times.
When looking at campaign recall, the study found that when a consumer was exposed to a campaign just once, recall increased by +26%, which was then reduced to +6% after ten exposures. The report revealed that two or three exposures are optimal for increasing both brand familiarity and favourability, which increases +4% and +7% respectively.
Don’t Overtly Disrupt
Estelle Reale, Global Marketing Director at Sublime, commented: “The findings of these studies reinforce the sentiment that bombarding users with ads isn’t the right strategy. Successful digital ad campaigns should not overtly disrupt the consumer’s browsing experience in an intrusive way. Repeat exposure is still extremely important, but overexposure could result in negative brand performance. Our research highlights that to truly engage with today’s consumers, brands should look to cap unique impressions on a campaign to improve its overall effectiveness.”
When measuring the success of Sublime’s ad units against a matched control group, aided brand awareness increased by +5pts with 77% of exposed respondents knowing the brand. Similarly, unaided awareness saw a +6pts increase. The report also revealed that brand familiarity, favourability, and purchase intent increased by +7pts, +8pts, and +7pts respectively.
Encouraging Engagement
Marc Rouanet, co-founder & CEO at Sublime added: “Our high-impact, engaging ad formats are designed to enhance the user experience rather than disrupt it. The results demonstrated here show that this creates greater engagement from users and subsequently better performance for advertisers and publishers.”
About Sublime
Sublime creates and delivers ad experiences that activate, captivate and inspire digital audiences at scale. It offers a high-impact marketplace where market-leading technology is combined with a creative-first approach; Sublime simplifies the delivery of premium, non-intrusive digital ad formats that elevate brand equity, drive results, and enhance the user experience. It is committed to breaking the mould in creative innovation, while delivering the highest level of service and support.Founded in 2012, the Paris-based company has offices in London, Düsseldorf, New York, Madrid, Milan and Singapore, and delivers direct and programmatic advertising campaigns across the globe.
For more information, please visit www.sublime.xyz.
About the methodology
These results are based on over 15 brand uplift studies conducted by Sublime in partnership with Dynata. As a single-source provider of first-party data, supplied by people who opt-in to digital ads and cookies, Dynata identifies consumers who have been exposed to the client’s media campaigns and monitors for passive exposure to the digital media for consumers that fit the campaign’s targets. These results are compared to a control sample to measure the efficiency of the campaign and the uplift of several branding KPIs such as brand awareness, campaign recall, brand opinion and familiarity.
Programmatic Trading Trends in Europe
Seminar room 7 , hall 5.1- 11th September at 16.00-16.45
In this seminar, IAB Europe’s Programmatic Trading Committee will bring together a panel of industry leaders and disruptors to explore how the programmatic trading landscape is evolving across Europe and how key trends such as programmatic audio are driving adoption in an ever-changing media consumption landscape.
The results of IAB Europe’s much-anticipated and industry benchmark studies, European Programmatic Market Sizing and Attitudes to Programmatic Advertising will be revealed as part of this session.
Moderator:
Author: Alwin Viereck, Head of Programmatic Advertising and Ad Management, United Internet Media
The king is dead, long live the king! What could be a better summary of the status of cookies and the adoption of post cookie technologies within the programmatic value chain? For some time now, the industry has been talking about the creeping exitus of cookies and the alternatives needed. So what has actually happened so far? And why is it now critical to discuss the alternatives out there? The following post provides insights into the reality of identity that we rely on in programmatic advertising and proposes solutions to move on to the next level.
The causal chain of identity
There is a very simple reason as to why everybody involved in programmatic advertising should care about the post cookie era, being it forced by regulation or browsers as gatekeepers: without cookies, there is no identity. Without identity, there is no data (targeting). Without targeting, there is no demand or at least, very low yield. Without demand, there is of course… no revenue.
The identifier and why it matters
A unique identifier (ID) exists in many forms – especially if you look at what is meant by the “uniqueness” of it. Generally speaking, an identifier is just a series of unique numbers, letters or symbols which marks an object unique. In databases it was typically a long number, nowadays in digital advertising systems, IDs are without symbolic meaning and typically come in a hashed form (e.g. CE06AC1ED1EA6E7B3254F14F19F515AD77E05871).
In a classic cookie-based web browser world, an ID was generated for a given device and per browser being used and stored in a (1st or 3rd party) cookie or local storage.
The ID itself is useless, unless data of any kind, e.g. targeting profile data for a user; capping or in case of compliance also consent is associated to it, which itself is not necessarily stored within a cookie but most of the time held on the server side.
Therefore it is key to be able to write an ID to a (more or less persistent) browser storage, associate data to it and read the ID whenever a user should be identified and decisions are taken based on associated data (e.g. user evaluation during bid pricing).
Further, it is key to define how an (unique) identifier relates to an identity – typically the latter is pseudonymously associated with a person. The average amount of devices being used per person today is around four[1]. So, having in mind the given cookie logic, at least four identifiers need to be associated in a graph to deliver your pseudonymous identity.
What are the challenges?
As may be obvious, the way/where IDs are stored in a cookie-based world (on a per device and browser bases) and how long the IDs are held (probability of deletion) in that storage, dramatically influences its entropy and accuracy of identity.
Based on data we see, more than 20% of all cookies in a desktop environment do not live longer than a day and a further 15-20% do not survive a month. For vendors in a third party context (which are typically all participants of the programmatic ecosystem), the problem might even be worse. That means, that most of the current cookie-based identification is based on only partial information, since the collecting of data needs to be restarted as soon as identifiers (stored in a cookie) gets lost. This is not it in terms of challenges; cookies are not available on mobile devices where much of consumer browsing time is now spent.
Mobile device dominated world
Cookies were a perfect deterministic solution in a desktop-browser only world. From a privacy perspective it was also easy to delete them or prohibit their creation on a device. This time is over since October 2016 latest, where 51.3% of internet usage worldwide[2] is generated by mobile devices.
In a mobile-device-dominated world, cookies are an aged solution unable to represent a full identity, since native apps do not allow reading/writing cookies. On mobile devices the cookie was superseded by device (ad) identifiers such as the IDFA (iOS: “Identifier for Advertising”), AAID (Android: “Android Advertising ID”) or Windows ID for (Windows Phone OS).
The two worlds also cannot easily be bridged, since browsers somehow never introduced this kind of mobile device ad identifiers in mobile browsers. A pity in my perspective, since it led to the development of fingerprinting and in some cases probabilistic voodoo (sorry, statistical methods) which are far from being as precise (=false positives/negatives) as pledged to build a multi-device profile.
Direct / indirect ad blocking
In the last few years about 25% of direct (adblock plus, ghostery, uBlock, AdGuard, Disconnect.me etc.) and about 5-10% indirect (typically anti-virus software which incorporates browser plugin features for ad blocking) of ad blockers are being used by consumers. So, a quarter of the cake is eaten before we are able to sit at the table.
Browsers as the gatekeeper
Aside from the rapid development of ad blocking, a further black hole for ad revenues in a programmatic first world arises. The browser vendors themselves push into the privacy gatekeeper position in parallel to the upcoming sanctions on GDPR – whether for own interest, anticipatory obedience to regulation or social responsibility should be better judged by others than me.
Safari started back in June 2017 with the introduction of Intelligent Tracking Prevention (ITP), a mechanism which through its evolving versions, led to a complete blocking of third party cookies. The blocking of first party cookies is upcoming.
Mozilla introduced of the Enhanced Tracking Prevention feature for Firefox in June 2019. The mechanism blocks third party cookies for advertising/tracking domains based on the disconnect.me list available on github.
Microsoft has just integrated a beta of its own tracking prevention in Edge which is not yet activated by default due to potential changes to it in the upcoming versions. Edge is based on Chromium since last year, therefore it will be interesting to see how Microsoft adapts changes introduced to Chromium by Google.
Last but not least, Google announced its latest privacy and security feature development plans for the Chrome browser (respectively Chromium[3]) during its Google I/O developer conference back in May 2019. Consisting of a same-site cookie[4] attribute (see IETF specifications, it describes a new attribute that can be set inside HTTP headers called "SameSite”. A SameSite attribute of "strict" will mean that a cookie can only be loaded on the “same site”, equals no reading of third party cookies with that attribute value. All old cookies will be considered cross-site), an anti-fingerprinting protection as well as a user interface component gives users a better choice of privacy settings. At the same time, Google announced its Chromium planning document manifest v3 change, which reduces the features of its webRequest API, plugins used to execute ad- or tracking blocking which means basically the death of external plugins of this kind.
GDPR changes the way we work
Nearly everything has been said or written during the last 12 months about the EU general data protection regulation[5] (GDPR) which took effect in May 2018. Notwithstanding that, I cannot spare a few sentences on how I think this will impact programmatic and especially identity handling in the future, not even talking about upcoming ePrivacy Regulation[6].
GDPRs lays down rules relating to the protection of natural persons with regard to the processing of personal data and rules relating to the free movement of personal data.
Programmatic advertising deals in many ways with the collection, usage/transformation and transfer of personal data, as defined by GDPR, for better results in bidding (pricing), ad delivery and user experience. At the same time, a lot of disparity exists in the handling of regulation due to many reasons.
A key area of work for the programmatic advertising stakeholders will be the argumentation of lawfulness of processing (article 6) mainly divided by (a) consent, (b) performance of contract or (f) legitimate interest.
The upcoming release of IAB Europe’s Transparency and Consent Framework v2.0 in mind, standardised purposes and features of processing such as:
will play a key role in this discussion along the given bases.
[1] https://www.statista.com/statistics/678739/forecast-on-connected-devices-per-person/
[2] https://gs.statcounter.com/press/mobile-and-tablet-internet-usage-exceeds-desktop-for-first-time-worldwide
[3] https://en.wikipedia.org/wiki/Chromium_(web_browser)
[4] https://web.dev/samesite-cookies-explained/
[6] https://ec.europa.eu/digital-single-market/en/proposal-eprivacy-regulation
Brussels, 23 July 2019 – IAB Europe, the leading European-level industry association for the digital marketing and advertising ecosystem, today released its full 2018 AdEx Benchmark Report. The report, now in its thirteenth year, is the definitive guide to advertising expenditure in Europe, with this study covering 28 markets.
Whilst the topline results from the research study were announced at the IAB Europe Interact event in Warsaw in June, today’s release of the full 80+ page report allows for a far deeper dive into the factors influencing market growth. This includes the impact from the introduction of the GDPR, as well as format trends for display, video, social, mobile, classifieds & directories and search.
The AdEx Benchmark study reveals that Europe is both a common advertising market, fueled by similar growth drivers, and also highly localised. Programmatic, social, video and other drivers have a similar impact across markets, regardless of their maturity. At the same time, markets differ strongly in terms of size and metrics like ad spend per capita. For example, although Germany boasts a larger population than the UK, its digital advertising is more than two times smaller than the UK. Patterns are similar in other large European economies, highlighting the continued development potential of digital advertising.
Over a decade of like-for-like data in Europe highlights the resilience of paid-for search, particularly in times of economic uncertainty. We continued to see double-digit growth for paid-for search in 2017 and 2018, despite the maturity of the format. This growth was helped by prices for mobile search picking up to approximate display levels.
Whilst the first half of 2018 showed all the signs of a slowdown, unsurprising when the market was responding to such a significant new regulation, the final figures for 2018 demonstrate how quickly it rebounded, ending with growth across Europe of 13.9 percent – the fastest growth experienced by the sector since 2011.
Commenting on the results, Townsend Feehan, CEO, IAB Europe said “In the year in which GDPR came into law, it is encouraging to see such healthy, double-digit growth across the entire region, driven largely by mobile and video. The digital advertising industry now contributes €55bn towards European Gross Domestic Product and is adding value to both mature and emerging markets. With digital advertising now accounting for 45 percent of all paid media advertising across the region, it is important that we focus on delivering privacy-first ad experiences which protect the user and ensure this contribution to national economies is sustained.”
Dr. Daniel Knapp, Chief Economist, IAB Europe continued “Mobile, video and social continue to drive growth across the region, with mobile now closing in on 50 percent of both display and search, and video accounting for a third of all display. These formats and environments reflect consumer engagement with a range of devices, for entertainment, utility and connection, demonstrating the diverse power of digital advertising to influence consumer decision-making.”
Other insights revealed within the report include:
For more information, please contact:
Marie-Clare Puffett, IAB Europe (puffett@iabeurope.eu)
Helen Mussard, IAB Europe (mussard@iabeurope.eu)
About IAB Europe
IAB Europe is the European-level association for the digital marketing and advertising ecosystem. Through its membership of National IABs and media, technology and marketing companies, its mission is to lead political representation and promote industry collaboration to deliver frameworks, standards and industry programmes that enable business to thrive in the European market.
About the AdEx Benchmark study
The data has been compiled by IAB Europe based on information provided by the national IAB offices around Europe. The report includes market size and value information for 2018 for the following markets: Austria, Belarus, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Norway, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, UK and the Ukraine. The data represents the calendar year 2018 January- December. This is the thirteenth AdEx Benchmark study which began in the calendar year 2006.
Display includes PC-based and mobile banners, rich media and video formats.
AdEx Benchmark is the definitive guide to the state of the European digital advertising market. The report reveals the key milestones contributing to the 2018 market value of €55bn and the fastest growth since 2011.
The report provides a comprehensive perspective of digital advertising spend across Europe which is essential in 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, attracting global start-up funding and European policy formulation.
Based on a study of twenty-eight markets in Europe, the report includes data on social ad spend and splits video by in-stream and out-stream. Out-stream video and mobile both dominated results in 2018, as they both grew by double-digits in all twenty-eight markets. Out-stream video grew by 44.7 percent on average, compared to in-stream at 19.7 percent. Overall, video grew by 30.9 percent, to €7.6bn, accounting for 33 percent of the display market.
The results and trends highlighted in the AdEx Benchmark Report will be discussed in our first Economic Trends Forum webinar on 25th July at 15.00 CEST / 14.00 BST. Find out more about the IAB Europe Economic Trends Forum here.
You can download the full report below
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