Market forecasts for 2020 show that digital advertising could decline by -5.5%. All other media expected to experience -21.3% decline this year.

IAB Europe, the leading European-level industry association for the digital advertising and marketing ecosystem, announced at its virtual Interact conference today that digital advertising grew 12.3% in 2019 to €64.8b (£57.8b), driven by strong growth in out-stream video, mobile and social spend. On average €4b (£3.6b) has been added to the digital advertising market every year since 2006.

2020 digital advertising forecast

Given the impact that COVID-19 that had on the industry’s operations and investments, the 2019 results were accompanied by a 2020 forecast for digital investment by IAB Europe’s Chief Economist Dr. Daniel Knapp. In its April 2020 forecast, the IMF predicted that COVID-19 and the global lockdown will spark the worst economic recession since the Great Depression of the 1930s. Knapp modelled his forecasts on macroeconomic indicators, paired with industry data to estimate a decline of 16.3% for Europe (including the UK). However, Knapp highlighted that digital is looking to be the least affected advertising media,  predicting a decline by -5.5% in 2020 in Europe compared to a stronger contraction (-21.3%) for other media.

2019 digital advertising investment

The AdEx Benchmark study is the definitive guide to advertising expenditure in Europe, covering 28 markets, and is now in its fourteenth year. In 2019, a total of 21 markets experienced double-digit year-on-year growth.

Video grew by nearly 30% to almost €10b (£8.9b); out-stream was the driving force behind this growth with an increase of 36%. In some markets out-stream experienced growth of more than 40%, for example Finland, Greece and the UK.

Social is fuelling display growth across Europe, up 25.6% year-on-year with double-digit growth in all 28 markets. Search remains the largest online advertising category in terms of revenue with a growth of 11.8% and a market value of €28b (£25b). Total mobile ad spend grew by 24.9% in 2019 to exceed €30b (£26b) to account for nearly half (47%) of all digital ad spend in Europe.

Townsend Feehan, CEO, IAB Europe, said “Whilst we are pleased to see another strong year of growth in 2019, we are well aware that 2020 will not follow the same trend due to the pandemic affecting all industries, businesses and lives. As an industry association with the aim of supporting digital business, we are working hard to provide insights into the impact of COVID-19 on investment levels, and support our members through these challenging times.”

The IAB Europe AdEx Benchmark study divides the digital ad market into three categories: Display, Search and Classifieds and Directories. Growth in these advertising formats has been underpinned by shifting uses in devices and changing consumption patterns.

Dr. Daniel Knapp, Chief Economist, IAB Europe, continued “The three forces mobile, video and social continue to drive growth across the region. As in particular programmatic and in-stream video mature, growth in the display segment outside social accelerated for the second year in a row, demonstrating the diverse opportunities in the digital advertising sector.”

CEE continues to dominate the growth in Europe and in 2019, as in 2018. The top five largest growth markets all came from the CEE region:

1. Serbia - 28.4%
2. Ukraine – 28.0%
3. Belarus – 25.2%
4. Croatia – 22.3%
5. Turkey– 19.1%

Top 10 rankings (by market size) are:

1. UK - €21.4b (£19.1b)
2. Germany - €9.4b (£8.4b)
3. France - €6.1b (£5.4b)
4. Russia - €4.9b (£4.4b)
5. Italy - €3.2b (2.9b)
6. Spain - €3.2b (£2.9b)
7. Sweden - €2.3b (£2.1b)
8. Netherlands - €2.3b (£2.1b)
9. Switzerland - €1.8b (£1.6b)
10. Norway - €1.3b (£1.2b)

The AdEx Benchmark Study highlights can be downloaded here.

The full AdEx Benchmark 2019 Report will be published on IAB Europe’s website (iabeurope.eu) in July 2020.