Eamonn Fallon (Chairman, IAB Ireland), Suzanne McElligott (CEO, IAB Ireland) and Bartley O'Connor (PwC) at the launch of the IAB/PwC 2010 Adspend Study
New research shows that digital advertising was worth €110 million in 2010 – and implies that digital publishers have taken further advertising market share from traditional media.
There was a 13.5% growth in spending on online advertising in Ireland last year compared with 2009, according to the 2010 IAB Ireland/PwC Online Adspend Study.
That trend is expected to continue this year, with almost four in five respondents (78%) in the study predicting “growth” or “strong growth” in the next six months.
The study values the Irish online advertising market at €110 million, up from €97 million in 2009. Neither PwC nor IAB will give figures for digital’s market share but industry estimates would reckon it would be around 15% to 16% of the Irish advertising market.
No direct references are made in the study to market shares and neither IAB Ireland nor PwC will speculate on the fall-out of the growth in digital advertising for traditional media However, advertising agencies say that category that has lost out the most to digital is print advertising.
Display formats take bigger share
Digital Media Mix 2010: breakdown by advertising format (based on figures provided by 95.9% of the market)
The IAb / PwC research shows that advertising on websites, social media and ad networks contributed to the growth of adspend on display formats, from 26.6% of digital spending in 2009 to 31% in 2010.
Search advertising -typically Google AdWords, accounts for a 25% share of the market and the IAB Ireland/PwC research implies that there has been some curtailment in search spending particularly among Irish SMEs.
Online classified and paid-search advertising again showed strong performances, with 25% and 44% respectively of the total digital spend.
Multinational players including Google, MSN and Yahoo appear to be benefitting from the upsurge in digital advertising, as do some but not all of the local websites. The digital marketplace continues to attract more participants which are seeking to take a slice of the Irish advertising pie. That is particularly true of classifieds, a sector which has seen significant migration from print to digital media. Most recently a plethora of online offers sites such as GroupOn (CityDeal.ie), LivingSocial.com and BoardsDeals.ie have proved attractive advertising vehicles to hotels, restaurants, spas and other traders who use them to promote special offers which would have been traditionally advertised their special offers in print.
Cars are top category
The IAB PwC study also identifies the key spenders in the display and classified formats.
Car ads were the top performing category for 2010 at 21%, followed by the combined recruitment/property sectors at 17%.
This is a reversal of the top categories in the 2009 study when recruitment/property was in the number one slot and cars came second.
The next three top performing categories were fast moving consumer goods (FMCG), telecommunications and finance.
Mobile, a hot digital sector in other countries, is not counted separately. But given RedC data that “smartphone penetration is set to grow to 55% of online users in 2012”, there is likely to be a greater appetite for brands to use mobile in their campaigns and to measure it through future IAB Ireland/PwC research.
Key drivers
The key drivers for online adspend in 2010 were identified as:
- Increased broadband connection
- Greater time spent online – average time spent online each week increased from 13.2 hours per week in 2009 to 19.1 hours in 2010. This reflects increased viewing time of online video, streaming TV and movies as well as the dramatic growth in social media usage
Methodology and process
- 26 leading publishers participated in the study, many of whom represent multiple websites. Other participants include sales houses and advertising networks. The research methodology reflects how PwC conducts similar research in other markets for their respective IAB trade orgaanisations
- Participating publishers were selected on the basis of traffic data and market knowledge. IAB/PwC estimate that their study accounts for 90% of online adspend. Reported figures were not adjusted to account for non-participating organisations
- Total advertising revenue is reported on a gross basis (i.e. including agency commission)
- Adspend revenue is drawn up on the basis of actual figures provided by study participants
- Google and Facebook do not break out their earnings from Irish advertisers. Instead PwC created an independent estimate of their revenue from Irish advertisers, by extrapolating from spend data provided directly by a representative sample of Google and Facebook clients
