Display advertising: Back with a vengance

New figures released by the European arm of the International Advertising Bureaux (AIB) point to a significant revival in the popularity of online display advertising.

With an average growth rate of 21.3%, Display overtook Search advertising as the fastest growing online ad format in Europe, according to the AIB’s annual AdEx survey.

Search, which has been the catalyst of online advertising growth in recent years, increased 15.1% in the same period across the 25 markets measured. Video, mobile and social media all contributed to the powerful performance of Display.

The survey shows the online advertising market accelerating at a growth rate of 15.3% in 2010. Total online ad-spend was €17.7bn in 2010, compared to €15.3bn in 2009.

The markets with the highest online ad-spend in the report are, in order, the UK, Germany, France, Netherlands, Italy and Spain. Together they account for almost three quarters (74%) of the total online advertising market. Central and Eastern Europe markets now represent almost a tenth (9.8%) of the total.

Paid search continued to grow double-digit at an average of 15.1%. It remains the biggest category in online advertising, with 45% of total advertising spend compared with 33% for Display and 22% for Classifieds and Directories. Whilst some of the more established markets experienced smaller increases (UK +8% like-for-like, France +10%) many saw explosive growth (Hungary +44%, Poland +31%).

The AdEx survey also looked at mobile advertising and mobile search advertising for the first time this year. Although mobile ad-spend figures are available for only 12 of the 25 markets, they confirm that the long-awaited take-off of mobile advertising has been realised thanks to the advent of the smartphone/3G/apps ecosystem. In those markets, mobile ad-spend already accounts for 2% to 3% of total online ad-spend.

With €17.7bn ($25.4) of ad-spend last year, online now accounts for 18% of the entire European advertising market. It is now beyond 20% in some markets (UK 29%, Denmark 28%) though only 5% in Greece and 4% in Romania. European market value is smaller than the US which also experienced a 15% growth rate last year and is now worth $26bn/€19.6bn.

Vincent Létang, Senior Analyst at IHS Screen Digest said “Back in 2009, video was the only growth engine in an otherwise flat Display market. In 2010 by contrast, three pillars – mobile, video and social – attracted new advertising investment. On top of fast-growing new formats, let’s not forget that traditional PC-based, banner-style formats have retained their appeal thanks to innovations in design and targeting and a rise in mainstream brands using Display for branding campaigns.”

Alain Heureux, President and CEO of IAB Europe, added “The IAB network has worked tirelessly to showcase how effective online Display advertising can be at supporting brand advertising campaigns. I am delighted to see that message has been getting through and the innovative ways brands are incorporating online in their advertising campaigns.”

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