IAB Canada: Internet Advertising Revenue Report 2012-2013
Canadian Internet Ad Revenues exceed 2012 forecast, hitting $3.1 Billion, significantly narrowing TV's lead – $3.4 Billion forecast for the Internet in 2013.
The Interactive Advertising Bureau of Canada today released the results of its year-end revenue report for 2012: Canadian Internet Advertising Revenues, consisting of Online and Mobile, rose to $3.1 billion (net) in 2012, up 15% from $2.7 billion in 2011. Online alone grew by 13% to 2.9 billion, exceeding last year's 2012 Online forecast by 2.8%. Mobile revenue almost doubled (+97%) to reach $160 million in 2012. Overall, Canadian Internet Advertising Revenues have continued their double digit growth rate since crossing the 1 billion mark in 2007, the 2 billion mark in 2010, and the 3 billion mark in 2012.
Canadian Internet ad revenues have risen to almost 90% versus TV's $3.5 billion in 2012, shrinking TVs lead to just +$382 million. The Internet's share of major media advertising revenue grew to 27.5% in 2012, while TV edged down to 30.9% (Note: calculation based on 5 major media - Internet, TV, Dailies, Radio and Magazines; Community Newspaper not yet available).
French Canada Online revenue grew by 14% to $559 million in 2012, continuing to represent 19% of total Online Ad Revenues in Canada in 2012, excluding Mobile.
Respondents to IAB Canada's 2012 Survey – i.e. Canadian media ad sellers including Digital Publishers, Ad Networks/ Exchanges, Mobile Carriers etc – projected that Internet Revenues would grow 9% to $3.4 billion in Total Canada by the end of 2013. This forecast includes 7% growth in Online to $3.1 billion and a 50% increase for Mobile to $240 million. French language Online ad revenues are forecasted to increase by 6% to $590 million, excluding French Language Mobile. NOTE: IAB Canada cautions that the 2013 forecast is based on budgets submitted by survey respondents in the 1st & 2nd quarters of 2013 and may be superseded by later marketplace developments.
The top-2 Online ad formats of Search and Display collectively represented $2.2 billion in 2012, for over 70% of all 2012 Internet revenue in Canada ($3.085 billion). Online Search was the key driver (21% growth) behind the Internet's 2012 revenue expansion. Online Display grew at 9%, below previous 18-22% annual growth rates during 2008-11. Over the past five years, the Online Search share of total Internet ad revenue has edged up to 42%, while Online Display's share has been flat at 30%. Online Video grew by 27% to $92 million in 2012, also outpacing overall Internet revenue growth.
The French language Online Search and Online Display formats both grew faster than their Total Canada counterparts, at +24% and +12% respectively in 2012. French language Video revenues grew by +90% to $15 million. French Mobile revenues are included in the Total Canada figure.
Says Chris Williams, President IAB Canada: "The dramatic growth of mobile devices and their use, both in and outside the home is driving market growth. Canadians seek more information whenever and wherever they are; marketers want to be there at that moment. Additionally there is an increased use of targeting precision across search, display and video driving media efficiency."
Survey respondent comments about the biggest challenges, changes and opportunities they have or will face in their individual businesses include the following:
o Rise of Programmatic Buying / Commoditization requires major publisher data management effort
o Premium Inventory Management is crucial to improved publisher revenue yields.
o Monetizing Mobile Investment continues to be a significant Publisher challenge
o More Quality Video Content needed to leverage pre-roll placements
o More Effective Publisher Positioning/Differentiation key to advancing direct buyer/seller relationships
o Digital Technology/Infrastructure Demands are High: i.e. new systems, tracking, staffing, skill sets.
About IAB Canada's 2012-13 Canadian Internet Advertising Revenue Report
The results of IAB Canada's Annual Canadian Internet Advertising Revenue Surveys are considered the most accurate measurement of Interactive advertising revenues in Canada. First commissioned in 1998, this marks the 15th consecutive year that Online Revenues are being reported and the 7th consecutive year reporting Mobile revenues. NEW this year, the Online and Mobile Survey results have been consolidated into a single 2012 Internet Revenue Report. IAB Canada retains Ernst & Young LLP to conduct the revenue studies. Results of individual respondent submissions are held in strict confidence by Ernst & Young and are released in aggregate form only. See the revenue report Appendix for details of the IAB Canada revenue survey methodology, including how net revenues are calculated and the anonymous "double blind" data collection procedure. The Canadian market totals in this report have been cleared for release by the IAB Canada Board of Directors and the IAB Canada Revenue Methodology Committee, the latter body created to recommend and oversee updates to Revenue Survey distribution lists and questionnaire design that reflect evolving industry needs.