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“Significant headroom for growth remains available”
The European digital advertising market grew by 30.5% in 2021 to €92B, marking its strongest YoY growth since 2008, according to IAB Europe’s latest AdEx Benchmark report.
“No markets experienced a decline in digital advertising, demonstrating that the digital advertising market has truly bounced back from the challenges and impact of COVID19,” says Townsend Feehan, CEO, IAB Europe.
The report covers 28 markets in Europe all of which experienced double-digit YoY growth in 2021. 16 markets grew between 20% and 28% and 7 crossed the average growth rate of 30.5%.
“All parts of digital advertising benefited from the 2021 bonanza,” adds Dr. Daniel Knapp, Chief Economist, IAB Europe, “but most notably those formats and approaches that enable small and medium-sized businesses, e-commerce related advertising, video-based storytelling, and formats that provide access to new consumer behavior at scale, such as audio and gaming.”
Display records highest growth
All formats showed robust growth with display (incl. banner, video, and audio) ads registering the highest growth (+34.5%). It was followed by paid-for search (+29.9%) and Classifieds, Directories and Affiliate (+11.3%). Display is over 50% of digital ad spend in a majority of markets.
“With digital ad spend at its highest growth since 2008, this is an exciting time to be part of this industry,” says Daniel Clayman, GM, Northern Europe, Xandr. “IAB Europe’s AdEx Benchmark study, portrays a sense of real recovery for digital.”
Social accounts for 25% of all digital ad spend and 50% of display spend making it a key driver of display growth.
Video is “front of the mind for the advertising industry”
Video is the fastest growing segment within social. It’s also a crucial driver for display growth and makes up 41% of all display ad spend.
Video, and specifically CTV, has been front of mind for the advertising industry for the last few years now. Growth is steady but this report shows that interest continues and brands need to ensure they are putting video at the forefront to reach targeted audiences.
Daniel Clayman General Manager Northern Europe, Xandr
“Video advertising is increasingly being automated,” adds Maria Shcheglakova, EMEA Marketing Director, PubMatic. “As the volume of video ad dollars grows, advertisers are turning to programmatic for efficiency and scale. Buyers and publishers appear to be diversifying their investments and working with a wider range of formats and tech providers.”
Programmatic outperformed I/O based display and now commands 57% of display.
“Growth demonstrates an exceptional opportunity”
Audio saw the highest growth in 2021 at 51.3% to €700M. “This still represents a small proportion of the digital advertising market but the growth demonstrates an exceptional opportunity,” the report states.
“Digital advertising had a record year in 2021,” writes Knapp. “Market performance was fuelled by the dual forces of cyclical economic recovery from the pandemic, and structural acceleration of underlying trends in digital consumption and commerce. We expect the net impact of digital transformation that came out of the pandemic to have accelerated the long-term growth of digital advertising market ahead of pre-pandemic estimates.”
Although market growth in 2021 was tightly clustered in the mid-20ies for most countries, European digital ad markets are heterogeneous with a wide range of ad spend per capita allocations even in markets of similar economic power. This signals that significant headroom for growth remains available.
Dr. Daniel Knapp Chief Economist, IAB Europe
The full report can be downloaded here:
IAB Europe AdEx Benchmark 2021
