European online ad spend tops €36bn and surpasses TV as the media for advertisers

To mark its annual Interact conference, the IAB’s pan-European leadership body has released a study demonstrating that the value of the online advertising grew 13.1 per cent last year to hit €36.2bn, surpassing the €33.3bn European TV market in the process.

The details were contained in the IAB Europe’s 10th annual AdEx Benchmark research - which records spending patterns across its different member states. It shows marked growth in mobile and video adspend across all surveyed territories, with the trade body also noting that more than €30bn of spend has been added in the last decade.

Townsend Feehan, chief executive of IAB Europe, said: “These results confirm the lead position for digital advertising in the European media landscape, echoing today's digital first consumer environment. Given the ever-increasing contribution of digital advertising to the economy and its role in the delivery of digital content and services we must continue to foster European innovation and empower our businesses to compete across the globe.”

The IAB Europe AdEx Benchmark study splits the online ad market into three broad segments: display, search, and classifieds and directories, with search (the largest category in adspend) totalling €16.9bn and representing 12.6 per cent annual growth, while display recorded the largest growth percentage (17.4 per cent) to hit €13.9bn.

Daniel Knapp, director of advertising research at IHS Technology (the research house behind the study), said: “Over the past ten years, online advertising in Europe has morphed from an afterthought in media buying into an indispensable set of channels for reaching and engaging consumers that now trumps TV in terms of overall marketer spend.

“Online advertising today stands for a diversified infrastructure that caters to multiple marketing objectives from direct response to branding, as the sustained growth of both paid-for-search and video in our study demonstrates.”

Mobile and video continue to be the key growth drivers of the European online ad market and this becomes increasingly apparent when looking at the more advanced mobile economies (such as UK and Ireland) where nearly 50 per cent of all online advertising is now generated on mobile.

Further analysis from IHS also revealed that mobile display now accounts for €3.5bn or 25.4 per cent of the display market, with a growth rate of 60.5 per cent compared with 2014.

Meanwhile, online video advertising also showed strong growth, now representing 16.7 per cent of the display market.

Eleni Marouli, principal analyst at IHS Technology, observed that in a challenging economic environment and flat media market, online advertising has kept the European advertising market afloat, and out of decline in 2015.

She added: "It is a fitting milestone to see online overtake TV as the largest advertising medium on the 10th anniversary of the AdEx Benchmark edition.

“Mature and emerging markets alike have noted strong growth rates again this year, demonstrating that innovation in formats, data and targeting continues to attract performance and brand budgets online."

Click here for a more comprehensive version of the report

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.