IAB Report Shows Slight Rise In Display Spend, But Mature Markets Get Hammered

Just when you thought it was safe to say that display was out of the woods along comes IAB Europe’s annual online advertising report to administer a dose of reality. The headline figures look reasonably healthy: search experienced double digit growth (10.8%) while overall display was up marginally by 0.3% year-on-year. But digging a little you can see some of the mature display markets got battered last year: France was down 6%, the UK decreased 5% and the Swedish display market fell by 5%. There is clearly something wrong given that the search continued to grow (albeit at a slower rate than previous years) in these markets. It appears the traditional display model is fundamentally broken.

The brand budget flow from offline to online doesn’t seem to be materialising. The bottom line here is that search continues to deliver where display splutters along. The report doesn’t delve into market share of exchanges and other automated platforms, but my feeling it is growing significantly. This site has long championed the efficiencies and ROI of audience buying. And if display is to continue to grow it must go down this route. Audience buying is the only game in town. The sheer wastage of the I/O bulk display buy will not meet the needs of cash conscious CMO’s. And in this economy return is what marketers are looking for. Long data-driven automated audience buys; short bulk buying spray-and-prey display campaigns. The good news is that display market has recovered somewhat in the first quarter of this year, but again it will probably compare unfavourably with search growth. Display needs to match the returns search has been consistently delivering for marketers in previous years.

Here’s the chart for the breakdown of the European online advertising market: