Study: Europe's Digital Ad Spend Neared €42 Billion in 2016 - eMarketer

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Study: Europe's Digital Ad Spend Neared €42 Billion in 2016

UK maintains spending lead in the region

May 25, 2017 | Ad Spending

Digital ad spending in Europe swelled 12.2% in 2016 to €41.79 billion ($46.23 billion), according to the Interactive Advertising Bureau Europe (IAB Europe) and IHS Markit, with spending gains seen in all 27 countries tracked.

The UK remained the region's leading market, with digital ad spend up a better-than-average 13.4% to €14.18 billion ($15.69 billion)—a value greater than the next three countries combined. It was one of 20 countries recording double-digit spending gains for the year, according to the IAB Europe and IHS. Three countries—Romania, Slovenia and Ireland—recorded growth rates of more than 30%.

Top 10* Countries in Europe, Ranked by Digital Ad Spending, 2016 (billions of €)

Among the leading countries by digital ad spending beyond the UK, Russia saw the biggest improvement, up 19.3%. However, gains were lower than the regional average in Germany (6.4%), France (7.0%) and Italy (10.1%).

On a regional basis, search remained the largest digital ad format by spending, up 12.9% to €19.12 billion ($21.15 billion). Display ad spending rose 13.8% to €16.19 billion ($17.91 billion), but the year's improvement was down from a 17.4% gain in 2015. Classified and directory ad investment swelled by 7.3%, accelerating from a 4.9% increase in 2015, to €6.50 billion ($7.19 billion).

Mobile continued to drive overall digital ad spending, rising an average of 53.3% across the region to total nearly €5.4 billion ($6.0 billion).

Mobile's share of overall digital ad investment climbed to 33% in 2016, up from 24.7% in 2015. Serbia led the charge when it came to increasing spending, up 327%, but regional spending leaders the UK, Italy and Germany recorded mid-double-digit gains, while in France investment surged 107.7%.

Video represented a growing share of spending, too, rising to 18.2% of digital display investment in the region and recording a value of nearly €2.9 billion ($3.2 billion) in 2016. Across the region, video spending rose by an average of 21.1%, with double-digit gains in most countries and gains in low triple digits in Slovenia and Serbia.

"Mobile and video are the powerhouses driving the European online advertising market as we enter a post-desktop banner advertising world," said Daniel Knapp, senior director of TMT at IHS Markit. "The rules and practices of online advertising have changed with these new formats and screens gaining ground, and our study shows that marketers' and publishers' efforts to innovate both in terms of measurement, delivery, targeting and creative are paying off."

"At the same time, our 2016 data shows that search and classifieds and directories have entered a period of rejuvenation with accelerating growth rates," he added. "Classifieds and directories is fueled by industry consolidation, and search benefits from better adoption of mobile and maps as search interfaces."

Thanks to digital's increased contribution to overall ad investment, total media ad spending in the region overtook an all-time high last set in 2008 by €1.2 billion ($1.3 billion).

IAB Europe and IHS Markit expect digital ad spending to rise by approximately 10% this year.

eMarketer's latest forecast of digital ad spending in Europe predicts outlays in the region will total $42.71 billion (€38.61 billion) in 2017, up 8.8% over 2016.

—Cliff Annicelli

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