2012 display businesstrends
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1) Publishers allocate their display inventory between direct "reserved" sales to advertisers and indirect "unreserved" sales through third parties like ad networks and exchanges. In 2011, publishers worldwide sold more impressions through unreserved channels than reserved channels. 2) Sell-through rates, or the percentage of reserved inventory sold directly by publishers, tend to be higher at the end of the year due to seasonal advertiser demand. The gap between reserved and unreserved inventory narrowed over the course of 2011. 3) Channel mix, the ratio of reserved to unreserved impressions, remained relatively steady for APAC publishers but shifted more for EMEA publishers towards the end of the year.
2012 display businesstrends
- 1. Display Business Trends Publisher Edition What’s Trending in Display for Publishers?
- 2. 1. Cha nnel mix 2 Publishers face the ever-changing complexities of selling display ads and reaching new audiences. As a business partner to publishers around the world, Google is no stranger to these 2. Publishe r Ver ti c a l a nd 6 challenges. We rely on data-based insights to guide our Geogra phic c o m p a r i s o ns business decisions. During our routine deep-dives into the publisher display dynamics, we frequently notice trends that may be of interest to our clients as well, which is what 3. Ad S ize s 20 prompted us to introduce this research publication. This premiere issue focuses on trends in the publisher display business. It is not meant to be a comprehensive industry report or forecast; rather its purpose is to share trends 4. Mobile Web Ad I m p r es s i o ns 28 that publishers worldwide may find useful in planning digital strategies, gleaning new insights, and supporting their hunches. The metrics in this publication are derived from Google publisher products—DoubleClick for Publishers (DFP), the 5. Vid e o ad s 34 DoubleClick Ad Exchange, and Google AdSense network—to allow us to provide commentary on various display patterns, including geographic, vertical, and ad size trends over time. Based on rigorous methodology, the data sets contain tens of 6. Append ix 38 billions of impressions served by publishers globally, and are aggregated to preserve publisher confidentiality. 1
- 3. Channel mix An ongoing challenge for publishers is to strike the right balance between direct sales (reserved) to advertisers and indirect sales (unreserved) through third-party channels such as networks and exchanges. How inventory is allocated between these two channels impacts overall ad revenue, since reserved inventory is generally sold at a higher price. In DFP, publishers 1. assign different levels of inventory according to each channel. These levels are aggregated here to illustrate what we’re calling the channel mix: the ratio of impressions between reserved and unreserved inventory. 3
- 4. Figure 1B Channel mix in DFP—Americas publishers How do sell-through rates vary during the year? 80 % Americas Observations The Americas most 70 % 65% closely resembled the 60 % 62% 62% overall global inventory 59% Sell-through rates (the percentage of reserved ad inventory sold by the 50 % unreserved mix, varying only by a single percentage publisher’s sales team) vary according to the time of year, with higher sell- 40 % 41% point in the first and 38% 38% 35% fourth quarters. through rates trending towards the end of the year. Although seasonal impact 30 % reserved on sell-through rates is a generally observed phenomenon, we wanted to 20 % Quarters Q1 Q2 Q3 Q4 understand its magnitude and variation by region. Overall, publishers in 2011 worldwide sold more unreserved than reserved impressions in 2011, and all regions exhibited similar compositions in channel mix. It’s also worth noting Figure 1c that overall total impressions have grown between 2010 and 2011. Channel mix in DFP—APAC publishers 80 % The rise in reserved impressions tends to be cyclical, with seasonal advertiser APAC Observations The ratio between 70 % demand causing an increase in sell-through rate in the fourth quarter. Globally, 65% 63% unreserved and reserved 60 % 62% 62% inventory held relatively the percentage of unreserved sales remained consistently higher than reserved unreserved steady throughout 2011, 50 % especially compared to throughout 2011, but the ratio between them steadily narrowed from a 28 40 % other global regions. 38% 38% 37% 35% percentage point spread in the first quarter to a 16 percentage point difference 30 % reserved in the fourth. We observe that towards the end of the year, EMEA publishers 20 % Quarters Q1 Q2 Q3 Q4 experience a more pronounced shift in channel mix compared with APAC in 2011 publishers displaying a slight divergence in channel mix in the fourth quarter. Figure 1a Figure 1D Channel mix in DFP—all publishers Channel mix in DFP—EMEA publishers 80 % Global Observations 80 % EMEA Observations Although reserved and The sell-through rate for 70 % 70 % unreserved impressions reserved impressions 64% 62% 62% 63% 60 % rose incrementally 60 % 60% 61% rose significantly in the 58% unreserved each quarter, reserved unreserved 53% fourth quarter, closing 50 % 50 % impressions grew at a the year with reserved 47% 40 % 42% faster rate in the fourth 40 % 40% and unreserved sold 38% 38% 37% 39% 36% quarter of the year. impressions closer to 30 % 30 % reserved reserved a 1:1 ratio. 20 % 20 % Quarters Q1 Q2 Q3 Q4 Quarters Q1 Q2 Q3 Q4 in 2011 in 2011 4 5
- 5. Publisher Vertical and Geographic Comparisons Using the aggregated impressions running through DoubleClick Ad Exchange and Google AdSense, this section compares how unreserved publisher inventory is spread across vertical subject 2. content and geographic areas worldwide. 7
- 6. Which verticals show growth in ad impressions? In 2011, 15 out of the 25 publisher verticals experienced double-digit growth in monetized impressions across AdSense and the Ad Exchange. Arts & Entertainment ranked No.1 in impressions, while posting a healthy 11% year- on-year increase. We also observed that both Shopping and Sports sites showed very strong growth, at 37% and 25% respectively. Online Communities and Business & Industrial sites experienced shifts in inventory mix, and contracted during the year. 8 9
- 7. 10 0 30% 20% 10% 10% 20% 30% 40% Ranking Impression % Growth year-on-year Figure 2a 1 Arts & Entertainment 11% 2 Online Communities -21% 3 Games 13% 4 news 18% 5 Computers & Electronics 9% 6 Internet & Telecom 0% 7 Shopping 37% 8 Sports 25% 9 People & Society 4% Jobs & Education 11% 10 Books & Literature 13% 11 Ad impression year-on-year growth rates by vertical on the Ad Exchange and Google AdSense Reference 12 -14% Autos & Vehicles 24% 13 Real Estate 17% 14 Food & Drink 11% 15 Business & Industrial 16 -25% Beauty & Fitness 1% 17 Finance -1% 18 Travel -1% 19 Health 15% 20 Law & Government 8% 21 Hobbies & Leisure 23% 22 Pets & Animals 29% 23 Home & Garden 23% 24 Science 22% 25 11
- 8. For this report, CPM is defined as the amount a publisher demand, some verticals command higher CPMs than others. Here, verticals How do verticals rank earns for delivering a thousand impressions through a are indexed from highest to lowest CPM. Indexes are compiled from the by CPM? single ad unit. This is different from the page-level or site- DoubleClick Ad Exchange because its composition of ad formats more level CPM. For various reasons, including advertiser accurately reflects the mix generally bought by advertisers. Figure 2B Indexed CPM comparisons by vertical for the Ad Exchange 300 250 257 221 200 200 199 170 170 150 153 147 143 137 100 107 105 105 104 100 96 89 82 81 74 73 73 69 67 50 46 0 Health Business & Industrial Jobs & Education travel reference pets & animals Beauty & Fitness food & drink news shopping Real Estate Hobbies & Leisure Science Home & Garden Internet & Telecom People & Society Games Finance Sports Computers & Electronics Arts & Entertainment Online Communities Books & Literature Autos & Vehicles Law & Government Real-Time Bidding Impact For years, publishers have monetized their unreserved impressions via third-party ad networks. through this programmatic channel. Although much has been debated about whether aggregated Increasingly, they are using ad exchanges and other yield management tools to maximize their spending on ad exchanges with RTB might cause a race to the bottom in publisher revenue, we’ve revenue from these partners in ways that complement their direct sales strategies. In 2011 observed this not to be the case. In previous studies, we’ve seen U.S. publishers gain an average of publisher earnings continued to grow via these channels, and we observed the highest growth 188% lift in revenue when the Ad Exchange wins the auction compared with fixed upfront sales occurring in exchange-based platforms. of non-guaranteed display advertising. In a separate study, we’ve observed EMEA publishers gain Spend on the Ad Exchange via real-time bidding (RTB) grew from 58% at the end of 2010 to 72% 73% in revenue where the Ad Exchange won against a complete channel mix of direct sales teams by the end of 2011. In 2012, we anticipate this growth to continue as buyers increase their spends and other networks. 12 13
- 9. Which countries generate the most impressions? publicité 광고 One of the most fascinating aspects of online advertising is seeing content originate from all over the world. North America and Western Europe have traditionally produced the largest online publishing businesses, and remain the 廣告 powerhouses of online content. In 2011, Asia-Pacific publishers, especially from East Asia, are delivering an even larger share of global impressions. With rising internet accessibility and usage growing worldwide, some of the fastest growth rates are being experienced by publishers outside these traditional hot-spots of digital advertising, presenting attractive regional diversification opportunities for publishers. This global map calls out the 2011 impression contributions of the top 25 Anuncio publisher countries on DoubleClick Ad Exchange and Google AdSense. We’ve been incredibly impressed by the size and growth from publishers based in China and Japan, who comprise 11% and 6% of total impressions, Объявление respectively. We also observe that publishers located in EMEA are experiencing significant impression growth. pubblicità Publishers included in this report come from 235 countries and territories—from established, highly populated nations like Japan right through to the island country of Palau, one of the More and more ad networks—of which Google AdSense is one— allow anyone with an internet connection and original content to earn revenue as an online publisher, facilitating creation of 広告 Anzeige world’s newest sovereign states. Below, we’ve highlighted some local content and new business models. Some are very small emerging markets that are posting extraordinary ad impression countries in terms of population, but post ad impression growth growth in 2011, and are ones to watch. rates that are (almost!) out of this world. Egypt 45% growth Laos 382% Indonesia 85% growth Equatorial Guinea 4635% growth Venezuela 79% growth Montserrat 990% growth Kenya 157% growth Palau 1106% growth 14 15
- 10. Figure 2C Impressions by country on the Ad Exchange and AdSense canada great britain germany poland romania Ukraine russia south korea 2.2% 4.2% 4.9% 2.5% 0.9% 1.0% 2.1% 1.8% Japan china 5.7% 10.5% other 12.8% U.S. 24.7% Argentina brazil spain france belgium Netherlands Italy turkey israel India thailand hong kong taiwan australia 0.9% 3.2% 3.1% 4.8% 0.6% 2.4% 2.1% 2.5% 0.8% 2.5% 0.7% 1.2% 1.0% 0.9% 16 17
- 11. Has CPM changed in top publisher countries? A snapshot of CPM changes during Q3 and Q4 of 2011 for the top 10 largest the overall slowdown in advertising spend in late 2011. Germany also countries by impressions on the Ad Exchange shows that CPMs varied widely. experienced a change in inventory that produced an atypical decline that was We observe that in many countries—including the U.S., Great Britain, and restricted to this quarter. In conjunction, we observed that reserved inventory France—CPM grew over Q3-Q4. In some EMEA markets, notably Spain and Italy, sales nearly matched unreserved sales in EMEA over Q3 and Q4 (see Section 1), CPMs fell significantly in the fourth quarter, but this seems to correspond with indicating a higher sell-through rate of premium-priced inventory. Figure 2D Changes in CPM by publisher country on the Ad Exchange 200 5% 180 173 160 165 2% 11% 39% 140 130 131 125 127 120 -16% 117 4% 100 94 88 0% 80 76 79 -33% -8% 74 14% 60 56 56 40 43 41 40 36 37 29 20 0 U.S. canada great germany spain france Italy Netherlands israel australia britain % %Growth CPM Q3 CPM Q4 CPM Q3 CPM Q4 CPM Q3 CPM Q4 Americas Americas EMEA EMEA apac apac 18 19
- 12. Ad Sizes Publishers can maximize their revenue by choosing to offer ad sizes that are in higher demand by advertisers. They aim to strike a balance between customized ad packages with exclusive sizes that can be tailored to the needs of an individual 3. advertiser, and standardized sizes that will accommodate creatives from the majority of advertisers and networks. 21
- 13. Which ad sizes are growing in popularity? 300 x 250 Publishers make decisions on ad sizes based on the audience they wish to target, the content environment, and the ad size that advertisers prefer to use to reach that audience. To determine the most popular ad sizes and 728 x 90 identify any growth trends, we took a look at ad sizes trafficked through the 320 x 50 DFP ad serving platform. The top three ad formats—the medium rectangle, leaderboard and skyscraper—comprise nearly 80% of all served ad impressions. However, the remainder of impressions span a wide variety of uncommon sizes. There were over one thousand different ad sizes trafficked— yet only 300 unique sizes posted more than 1 million impressions during 2011. 300 x 600 The growth in non-standard ad sizes is notable, and it has mostly been at 468 x 60 the expense of traditional ad sizes like the 468 x 60 banner and 120 x 600 skyscraper. Of interest is the growth of larger “premium” formats, which 160 x 600 300 x 100 offer advertisers a richer visual canvas for their creatives. 88 x 31 120 x 600 336 x 280 22 23
- 14. Figure 3a Growth of top 10 ad sizes by impressions served through DFP and platforms 119% 120% 100% 80% 70% % of impressions 60% % Growth Q1–Q4 40% 37% 33% 32% 21% 20% 18% 13% 10% 3% 2% 2% 2% 2% 1% 1% 1% 0% 20% -16% -15% 300 x 250 728 x 90 160 x 600 468 x 60 120 x 600 300 x 100 88 x 31 300 x 600 336 x 280 320 x 50 Top Three Ad Units Smaller-sized ad units Premium ad sizes Mobile ad sizes The medium rectangle, leaderboard, and In general, impressions shrank in this category. The In 2011, 300 x 600 and its companion sizes 300 x 50 and In 2011, mobile optimized sizes, including 320 x 50 skyscraper comprise the vast majority of ads 468 x 60 banner and 264 x 60 half banner, as well as 300 x 100 grew by double digits, and were particularly and 300 x 50, experienced record growth among served. All three posted robust growth rates. buttons 125 x 125 and 120 x 120, have become less favored by News, Sports, and Entertainment publishers. publishers. The 300 x 50 is the 21st most popular popular. The only small unit that is holding its ground The increase in the 300 x 600 unit is indicative of a trend ad size, but grew 186% in 2011. is the 88 x 31 micro bar, which is mostly used to where publishers are offering more visually impactful advertise financial products. ad sizes that are favored by brand advertisers, over the functionality to direct response advertisers. 24 25
- 15. How do ad sizes compare by CPM? The CPM index of the 10 most popular ad sizes on the Ad Exchange shows that Ad networks show fewer ad size variations since most sellers and buyers have the 300 x 250 medium rectangle posted a 12% increase over the leaderboard standardized their offered inventory to reflect the most popular ad sizes. One and an 18% increase over the skyscraper formats in 2011. The top three explanation for the relatively high CPM of the 336 x 280 large rectangle may be ad sizes in the Ad Exchange comprise approximately 95% of all impressions the result of lower publisher supply for this format. However, advertiser served, and they are identical to the top three ad sizes seen on DFP. demand is also correspondingly lower. Figure 3b Ad Size CPM Comparisons on the Ad Exchange 180 160 159 140 120 109 100 97 92 80 68 60 53 40 41 27 20 14 8 0 300 x 250 728 x 90 160 x 600 468 x 60 120 x 600 336 x 280 200 x 200 234 x 60 120 x 240 125 x 125 26 27
- 16. Mobile Web Ad Impressions With consumer mobile usage growing rapidly, publishers are rethinking their content monetization strategy. Advertisers look to reach audiences across screens and formats, and publishers are responding to this demand with ever-more sophisticated 4. channels for monetizing mobile content. Mobile has become essential to the overall ad inventory mix, but some publisher verticals on the mobile web are growing faster than others. 29
- 17. Is mobile growing across the board? There has never been a better time for publishers to engage mobile users, whether through a mobile-optimized site or a full-featured app. Growth in mobile usage has exploded with impressions on the Ad Exchange and AdSense platforms increasing by 250% over Q3 and Q4 2011. This growth is not just happening in highly mobilized cities like Seoul and San Francisco, but also in emerging markets where users are first interacting with the internet not on a desktop but on a mobile phone. Both mobile and desktop ad impressions exhibit strong growth, but due to increased mobile web usage, mobile ads are growing at a faster rate and have increased as a proportion of overall ad impressions. We took a look at mobile web impressions over the last quarter of 2011 to get a sense of average vertical impression growth. Globally, all publisher verticals, with the exception of Travel, experienced double-digit growth in mobile web ad impressions in the fourth quarter of 2011. As might be expected from seasonal consumer mobile usage, the strongest vertical market in mobile usage was Shopping, with 69% growth, followed by Food & Drink at 61%. 30 31
- 18. Figure 4a Global mobile web ad impression growth by vertical on the Ad Exchange and AdSense 69% 61% 47% 45% 45% 43% 41% 40% 40% Shopping Food & Drink People & Reference Books & Online Law & Internet & Computers & Society Literature Communities Government Telecom Electronics 39% 36% 35% 32% 31% 30% 29% 28% 28% 25% 23% 22% 20% 19% 18% 9% Games Arts & Science Health Pets & Jobs & Hobbies & Business & Home & news Finance Real Estate Beauty & Sports Autos & Travel Entertainment Animals Education Leisure Industrial Garden Fitness Vehicles 32 33
- 19. Video Ads Videos tell stories—from publishers as well as advertisers. Video is becoming a lucrative part of a publisher’s ad inventory, partly because it offers creative opportunities that attract brand advertisers, and partly due to tremendous viewer 5. demand. We’re excited about the growth in video advertising, and we have more comprehensive metrics in store—so stay tuned for more to come. 35
- 20. Figure 5a Video ad length How do video ads impact viewers? Video content monetization is now one of the fastest-growing segments in advertising. Publisher video impressions grew nearly 70% in the second half of 2011 across the DFP Video platform. As measured across in-stream video impressions in DFP, the average midpoint and completion rates of a video ad come in at 79% and 72%, respectively. About 51% of video ads run between 15 and 30 seconds in length, with 36% running more than 30 seconds, and 15 to 30 seconds over 30 seconds less than 15 seconds only 13% running less than 15 seconds. We’re also seeing a 175% increase in impressions on the 640 x 360 ad unit that fits wide-screen players. Conversely, 51% 36% 13% we’ve observed a decrease in standard aspect-ratio video player impressions, indicating that they’re phasing out. Figure 5B In-stream video ad completion rates Midpoint 79% Completion 72% 36 37
- 21. Appendix Important notes about the data in this report • The data sets used to obtain the metrics presented in this report are sourced from DoubleClick for Publishers (DFP) ad serving platform, the DoubleClick Ad Exchange, and Google AdSense. • The data sets contain tens of billions of impressions served by publishers globally for the year 2011. • Although revenue and absolute CPM benchmarks would be useful to publishers, to preserve client confidentiality, that information is unavailable. • A publisher’s vertical is determined by the site’s primary content subject. • A publisher’s geography is determined by their billing country. 6. 39
- 22. Google’s Publisher Display Products DoubleClick for Publishers (DFP) is a comprehensive DoubleClick Ad Exchange enables publishers to ad serving solution that helps publishers streamline make the most of every display impression, across their ad management to increase efficiency every channel. It is the only ad exchange that offers and minimize costs. Featuring efficient trafficking real-time access to every major demand source, workflows, robust inventory management and including the Google Display Network. In addition, forecasting, revenue optimization, and granular the Ad Exchange connects seamlessly with the DFP reporting, DFP equips publishers with a complete ad serving platform, making it easy for publishers to tool kit for ad delivery and revenue optimization achieve the maximum value from every impression. across all digital ad inventory. DFP can be seamlessly For more information, visit google.com/doubleclick customized with platform modules to meet a publisher’s current and future advertising needs. For more information, visit google.com/dfp Google AdSense is a free program that helps online Admeld, acquired by Google in December 2011, is publishers earn revenue by displaying relevant text the most recent addition to DoubleClick’s publisher and display ads on a wide variety of online content, offerings. Admeld helps the world’s top online including websites, site search results, mobile sites, publishers sell their ad inventory smarter, capture video content and games. The Google AdSense new revenue streams, and simplify their operations. program includes more than 2 million publishers Admeld’s unique approach is marked by high-touch globally and supports 33 different languages. For services and its track record of innovation in Private more information, visit google.com/adsense Exchanges, Traditional Yield Management, and Mobile Yield Management. For more information, visit admeld.com 40