How big are we really?

Alain already wrote about this, but this week has been a very busy one for me and especially my team as we struggle to gather all the data necessary to answer a simple question. How big is this industry?

The question is of course a simple one and the answer should be too. But the path to this answer is a very difficult one. And not just because gathering the data in itself is a slow process. But there are a lot of things that need to be answered before that in order to get the right data. Let me just start with the first one. NET or GROSS.

Well in fact the question is not so Shakespeare-ian. The right question is: Net, Gross, Gross with volume discounts (or Gross Gross as we like to call it), Rate Card , and so on?. The fact is that different countries use different methodologies to establish the value of a market. And this is of course a big obstacle in trying to set a common denominator for the adspend across Europe. So there is not other way to set the market for the whole Europe but to try to estimate the differences between gross and net.

And this differences can be, believe me, very different by country to country. Luckily enough IAB Europe has a distinct advantage in this matter. People within the country organizations around Europe are the very people that know their online markets inside out. So estimating the differences between one and the other is much easier and precise. The other good part if it is that by doing that people in those markets and across Europe begin to gain an even more extensive knowledge of the other markets.

For comparison is always good. It tells you where you stand and where should you be in a few years time. And it brings people around the table once again. A thing that IAB Europe has always done and always will. :-)

ZenithOptimedia: global online adspend to overtake radio in 2008

ZenithOptimedia released an update of its global ad spending outlook. It’s impressive to see how spending in online advertising keeps beating the prognoses: ZenithOptimedia expects the global online adspend to grow with 28,2 % this year. The rest of the media will grow with 3,7 %.

In three global markets online already accounts for more than 10 % of the overall adspend. All three of these markets are European: the UK of course (in 2007 16,6 % of overall adspend according to Zenith), Sweden and Norway.

By 2009 these three markets will be joined by Denmark, Australia, Canada, Israel, Japan, South Korea, Taiwan and the US.

ZenithOptimedia expects the global online adspend to overtake radio adspend by 2008. This is one year sooner than previously expected.

Check out more details in the ZenithOptimedia press release on this link (PDF).

The user revolution

I accepted very kindly the invitation to write on this blog and I’d like to suggest some topics come out from the massive analysis “The user revolution” recently posted from Piper Jaffray, one of the most famous american business banks. I’m sure that most of topics treated in this research will be very popular during the next IAB European Congress; meanwhile here are the 12 resuming points confirming without any doubt the changes on the way:

1. Global online advertising revenue to reach $81.1 billion by 2011.
2. Communitainment: Internet has increasingly become a principal medium for community, communication and entertainment -- three areas that have collided and are impacting each other's growth -- generating a new type of activity: communitainment. Communitainment is taking time away from other, traditional, types of content consumption on the Internet.
3. Usites - The increasing popular category of user generated sites, which we are calling Usites, are driving traffic away from other destinations and pose a challenge to the advertisers and publishers.
4. The Internet is now a mainstream medium: The web is the leading medium at work and the second leading medium at home behind television.
5. Internet usage patterns are changing, favoring Usites,communitainment sites, search, and away from traditional portals.
6. User Generated Brands. The consumers are taking control of content consumption and branding.
7. Media Fragmentation: Advertisers increasingly will need to buy more inventory, from nearly all types of media, especially the Internet, to have the desired impact.
8. The Golden Search: search has become the new portal.
9. Google's dominance is likely to expand, partly fueled by a wide variety of non-search related products that create a virtuous cycle of brand affinity for Google.
10. Video ads will be the driver of the next major growth in brand advertising and getting additional dollars shifted from traditional media to online.
11. Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding and increased site visibility.
12. Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.

It has been several years since Piper Jaffray is involved in studying the online communication business. Their “Golden Search” (2003) has considered the turning point in search marketing analysis and quite all their forecasts have been confirmed.

Online advertising: UK shows the way in Europe

IAB UK released its 2006 data about internet advertising and online ad spend across the Channel. We, Europeans from the ‘old continent’ can only watch them, say ‘gosh’ and hope that IAB Europe can play a role in helping us to achieve similar results ;-)

IAB UK found that online expenditure overtook national newspaper spending and online was over half the size of the TV advertising market. In the UK, Internet now accounts for an impressive 11,4 % of all advertising revenues.

Also interesting to see how Search Engine Advertising still outgrows display advertising.

Check it out on http://www.iabuk.net/en/1/iabadspend2006.mxs