IAB internet advertising revenue report 2017 first six-months results

Transcription

1 IAB internet advertising revenue report 2017 first six-months results PwC Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.

2 Agenda Survey methodology First six-months and quarterly trends Mobile trends Advertising formats Social media Audio Pricing models About PwC PwC 2

3 Survey Methodology Survey Scope The IAB Internet Advertising Revenue Report is part of an ongoing IAB mission to provide an accurate barometer of Internet advertising growth. To achieve differentiation from existing estimates and accomplish industry-wide acceptance, key aspects of the survey include: Obtaining historical data directly from companies generating internet (desktop and mobile) advertising revenues; Making the survey as inclusive as possible, encompassing all forms of internet advertising, including websites, consumer online services, ad networks and exchanges, mobile devices; and Ensuring and maintaining a confidential process, only releasing aggregate data. Methodology Throughout the reporting process, PwC: Compiles a database of industry participants selling internet advertising revenues. Conducts a quantitative mailing survey with leading industry players, including web publishers, ad networks, commercial online service providers, mobile providers, and other online media companies. Requests and compiles several specific data items, including monthly gross commissionable advertising revenue by industry category and transaction. Acquires supplemental data through the use of publicly disclosed information. Identifies non-participating companies and applies a conservative revenue estimate based on available public sources. Analyzes the findings, identifies and reports key trends. PwC 3

4 Half year revenues totaled $40.1 billion in 2017 Revenues for HY 2017 were 22.6% higher than in HY % $32.7 HY 2016 vs. HY 2017 (billions) ) $40.1 Revenues for HY 2017 totaled $40.1 billion, $7.4 billion (22.6%) higher than in HY 2016 HY 2016 HY 2017 PwC 4

5 2017 second quarter revenues totaled $20.8 billion Q vs. Q ($ billions) 23.1% $20.8 Revenue in Q was $3.9 billion higher than in Q $16.9 Q2 16 Q2 17 PwC 5

6 20.8 Strong growth between Q and Q Q vs. Q ($ billions) 7.4% $19.4 $20.8 Revenue in Q was 7.4% billion higher than in Q Q1 17 Q2 17 PwC 6

7 In billions Since 2010, a strong seasonal trend has emerged for internet advertising revenues Quarterly growth comparison, 1996 HY 2017 Quarterly revenue growth trends ($ billions) $25 $20 $15 $10 $5 $0 PwC 7

8 Half year 2017 shows record revenues of $40.1b Historical revenue mix, first half vs. second half Historical revenue mix, first half vs. second half revenues ($ billions) $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 $11.2 $11.9 $11.8 $13.9 $16.8 $19.5 $10.0 $11.5 $10.9 $12.1 $14.9 $17.0 $22.7 $26.4 $32.1 $20.1 $23.1 $27.5 $39.8? $32.7 $ Last 6 months Over the past ten years, second half revenues averaged 53% of the annual total First 6 months PwC 8

9 Top 25 companies commanded 84% of revenues in Q % share of total revenues $25 $20 $15 $10 Top 10 Top 25 Remaining 2017 Q2 Share 16% 9% 75% $5 $0 PwC 9

10 Historical Trends: Desktop vs. Mobile The shift to mobile continues 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 93% 86% 77% 70% 53% 54% 47% 46% 30% 23% 14% 7% HY 2012 HY 2013 HY 2014 HY 2015 HY 2016 HY 2017 Desktop Mobile PwC 10

11 Mobile growth driving the overall industry growth rate Mobile Non-Mobile ( $ billions) 76.8% Mobile CAGR 15.4% Overall CAGR $16.9 $20.8 $14.3 $11.4 $5.7 $5.4 $6.2 $7.7 $8.8 $0.7 $10.3 $1.6 $11.7 $2.8 $4.4 $8.2 $5.7 $5.4 $6.2 $7.7 $8.1 $8.6 $8.9 $9.9 $8.7 $ * CAGR: Compound Annual Growth Rate PwC 11

12 Advertising formats HY 2017 Banner and video increase share as search declines HY 2016 HY 2017 Ad formats - HY 2016 Total- $32.7 billion*** 12% 30% 9% 49% Search Banner Video Other** 13% 31% 9% 47% Ad formats - HY 2017 Total- $40.1 billion*** PwC 12

13 HY 2016 HY 2017 Digital video is split across devices $2.6 $1.6 $2.6 Total digital video, including mobile and desktop, rose to $5.2 billion in HY 2017 $2.3 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 Mobile Video Desktop Video Historical Digital Video Revenues, Half Year ($ billions) PwC 13

14 Social media demonstrates continued growth Social media ad revenues, 2012 HY 2017 Half year 2017 ad revenues from social media increased 37% from half year 2016 Social media advertising revenue ($ billions) $6.4 $7.0 $9.3 $9.5 CAGR* 51% $4.1 $4.4 $1.2 $1.7 $1.9 $2.6 $2.9 1H H H H H H H H H H H 2017 * CAGR: Compound Annual Growth Rate PwC 14

15 The first six months of 2017 saw $603 million in audio advertising revenue Digital audio advertising revenues by format, HY 2017 (in millions) $155 $448 Mobile Audio Desktop Audio PwC 15

16 Pricing models Internet ad revenues by pricing model, HY 2016 vs. HY 2017 Pricing models HY 2016 Pricing models HY 2017 Total $32.7 billion Hybrid 1% Total $40.1 billion Hybrid 2% CPM 34% CPM 33% Performance 65% Performance 65% PwC 16

17 % of total revenues Historical pricing model trends Internet ad revenues by pricing model, 2005 HY 2017 Internet ad revenues by pricing model* 70% 60% 50% 40% 30% 46% 48% 51% 47% 45% 41% 65% 66% 65% 66% 65% 64% 62% 65% 59% 57% 39% 37% 33% 31% 32% 33% 33% 35% 33% 33% 20% 10% 0% 13% 5% 4% 4% 4% 5% 4% 2% 2% 1% 2% 1% 2% CPM Performance Hybrid PwC 17

18 PwC s Technology and Entertainment, Media, and Communications practices As business, accounting, and tax advisors to many of the world s leading Entertainment, Media, and Communications (EMC) and Technology (Tech) companies, PwC ( has an insider s view of trends and developments driving the industry. With approximately 1,200 practitioners serving EMC and Tech clients in the United States, PwC is deeply committed to providing clients with industry experience and resources. In recent years, our pioneering work in EMC and Tech has included developing strategies to leverage digital technology, identifying new sources of financing, and marketplace positioning in industries characterized by consolidation and transformation. Our experience reaches across all geographies and segments of the EMC and Tech sectors, including broadband, wireless, the internet, music, film, television, publishing, advertising, gaming, theme parks, computers and networking, and software. With thousands of practitioners around the world, we're always close at hand to provide deep industry knowledge and resources. Our services include: Business assurance services Web audience measurement and advertising delivery auditing and advisory IAB Measurement Certification Compliance auditing Privacy policy structuring, attestation, and compliance advisory Mergers & acquisitions assistance Tax planning and compliance Capital sourcing and IPO assistance Marketing & Media operations enablement PwC November December

19 Technology and Entertainment, Media, and Communications practices Contacts For information, contact one of the following PwC professionals: New York David Silverman Partner, Assurance Services York Brian Gaffney Manager, Advisory Services PwC 19

20 PricewaterhouseCoopers has exercised reasonable care in the collecting, processing, and reporting of this information but has not independently verified, validated, or audited the data to verify the accuracy or completeness of the information. PricewaterhouseCoopers gives no express or implied warranties, including but not limited to any warranties of merchantability or fitness for a particular purpose or use and shall not be liable to any entity or person using this document, or have any liability with respect to this document. This report is for general purposes only, and is not a substitute for consultation with professional advisors PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal PwC entity. Please see for further details.