COVID-19 has ended years of double-digit growth for the digital advertising industry in Europe, but new figures from IAB Europe indicate that its decline in 2020, at -5.5%, will be far less than that experienced by all other media, at -21.3%.

IAB Europe's findings tally with WARC's latest Global Ad Trends report, published last Thursday, which predicts a 6.5% dip in European internet spend this year, led by sharp falls in the UK.

Announcing the trade body’s initial assessments for 2020 at yesterday’s virtual Impact conference, Dr Daniel Knapp also reported that the forecast for May was better than April, based on “extremely positive signals from company reports – from adtech companies, from platform companies and others”.

An initial assumption that May and June would trend in line with April seems to have been misplaced. It appears things bottomed out in the second half of April “and it looks like, right now, as we’re easing into June, that Q2 isn’t lost overall”.

Any signs of “improvement” in Q2, he stressed, are simply things getting less worse on a year-on-year basis. But the main digital formats of social, search, video and banner advertising are all expected to be back in growth by Q4.

Video is currently being driven by performance marketing – “brand spend has ground to a halt,” Knapp observed, but he anticipates brand budgets returning at a larger scale in the final quarter “as CPMs are cheap and it’s important for brands to up their share of voice”.

While IAB Europe is forecasting all markets to grow in 2021, “the growth is not enough to recoup all the losses,” Knapp said. “You're probably going to face a three-year period for ad markets to recover, but digital will be fast – 12 to 14 months.”

Looking back to last year, the trade body’s annual AdEx AdEx Benchmark study, covering 28 markets across Europe, shows that digital advertising grew 12.3% in 2019 to €64.8bn, driven by strong growth in out-stream video, mobile and social spend.

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

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

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:

Sourced from IAB Europe