Which segments have the most growth momentum?
The World Online Advertising Market
IDATE has released its latest study, “The World Online Advertising Market.” The report takes a look at the importance of new segments such as mobile advertising, online video advertising and ads on social networking sites, while also covering the more traditional markets of search and display. Complete figures for key countries and regions provide a comprehensive view of the online advertising market through 2014.
“The Internet is still predominantly a below-the-line advertising medium. Search marketing (sponsored links) has accounted for more than half the global online ad market in 2010, or 18.6 billion EUR. Its share is expected to grow to 61% in 2014, for estimated revenues of 52.4 billion EUR. Global display revenues will swell from 13.8 billion EUR in 2010 to 26.9 billion EUR in 2014. Thanks to the development of blind networks and, more importantly, to rich media and video formats, display will continue to control about 32% of the market worldwide,” comments Vincent Bonneau, Director of the Internet Business Unit at IDATE. “Video advertising will be the online ad format with the most growth momentum over the coming years.”
Emerging markets on the rise: the mobile Web, social networks and online video
• Advertising revenues from these three types of service remain nominal, totaling just 6.6 billion EUR in 2010 despite the massive usage of Facebook, YouTube and the AppStore. Earnings generally come from traditional ad formats that have been transposed onto the new services. Custom formats such as overlay, location-based ads and social graph targeting still only account for limited revenues. For the time being, social networks are the largest of the three emerging segments worldwide, and in most individual countries. However, in Japan, Italy and South Korea the mobile Web leads the pack.
• Up significantly since the middle of 2008, spending on Internet video advertising will continue to grow in the years to come. Video advertising will be the most dynamic format in the online ad market, propelled by technical advances in the field combined with the tremendous explosion of online video consumption. Video advertising has become a powerful growth engine for the display market in particular, for it can be beautifully adapted to advertisers’ branding concerns. Plus, it allows advertisers to repurpose the commercials they develop for television.
• Online video sites and services will be the first to benefit from this boom. Ad revenues from online video sites will grow at an average annual rate of 54.4%, to capture 13% of the Internet advertising market in 2014 with 11.2 billion EUR. Video will in fact be the largest of the three emerging markets in the US and Europe in 2014, although the mobile Web will dominate globally.
• Bolstered by the growth of smartphones and the mobile Internet, mobile advertising emerged in 2009 (except for in Japan, where it was already a major market). The mobile ad market is expected to grow at an average annual rate of 47.6% worldwide, to represent 12 billion EUR in 2014, or 14% of the global online advertising market. Since revenues from mobile advertising currently come more from display than from search marketing, this segment (like the video segment) is helping limit the decline of the display market. Thanks to location-based services, mobile Web advertising will also benefit from monies shifted from the local advertising market. And the mobile Web will continue to be far and away the top emerging market in Asian countries.
• Despite their mammoth audience, social networks will grow at a less impressive rate, but still faster than the overall market, with an average rate of 25.4% per year. In 2014, social network advertising will capture 6.1% of the global market with 5.2 billion EUR. Not only will this market be weaker than the other two, but it is expected to benefit just a handful of players, whereas many more companies will be sharing the spoils of the boom in the mobile and video markets.
Director of the Internet Business Unit
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