Display Business Trends Publisher Edition
What’s Trending in Display for Publishers?
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Cha nnel mix
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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
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Publishe r Ver t i c a l a nd
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Geogra phic c o m p a r i s o ns
challenges. We rely on data-based insights to guide our 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
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Ad Size s
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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
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Mobile Web Ad I m p r es s i o ns
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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
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Vide o ads
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
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Appendix 38
billions of impressions served by publishers globally, and are
aggregated to preserve publisher confidentiality. 1
Channel mix
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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 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
Figure 1B
Channel mix in DFP—Americas publishers
How do sell-through rates vary during the year?
80 %
Americas Observations
The Americas most
70 %
Sell-through rates (the percentage of reserved ad inventory sold by the
60 %
62%
62%
unreserved
closely resembled the
59%
40 %
through rates trending towards the end of the year. Although seasonal impact
30 %
on sell-through rates is a generally observed phenomenon, we wanted to
20 %
overall global inventory mix, varying only by a
50 %
publisher’s sales team) vary according to the time of year, with higher sell-
understand its magnitude and variation by region. Overall, publishers
65%
single percentage
35%
38%
38%
Q2
Q3
41%
point in the first and fourth quarters.
reserved
Quarters in 2011
Q1
Q4
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.
The rise in reserved impressions tends to be cyclical, with seasonal advertiser
demand causing an increase in sell-through rate in the fourth quarter. Globally, the percentage of unreserved sales remained consistently higher than reserved throughout 2011, but the ratio between them steadily narrowed from a 28
Channel mix in DFP—APAC publishers 80 %
APAC Observations
The ratio between
70 % 60 %
65%
62%
62%
63%
unreserved
especially compared to
40 % 30 %
in the fourth. We observe that towards the end of the year, EMEA publishers
20 %
experience a more pronounced shift in channel mix compared with APAC
Quarters in 2011
inventory held relatively steady throughout 2011,
50 %
percentage point spread in the first quarter to a 16 percentage point difference
unreserved and reserved
35%
38%
38%
37%
Q2
Q3
Q4
other global regions.
reserved
Q1
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
Although reserved and
70 % 60 %
64%
62%
62%
unreserved
unreserved impressions
58%
50 % 40 % 30 %
36%
38%
38%
42%
4
each quarter, reserved impressions grew at a faster rate in the fourth quarter of the year.
reserved
20 % Quarters in 2011
rose incrementally
80 %
EMEA Observations
The sell-through rate for
70 % 60 % 50 % 40 % 30 %
63%
60%
53%
unreserved
37%
40%
reserved impressions
61% 47% 39%
rose significantly in the fourth quarter, closing the year with reserved and unreserved sold impressions closer to a 1:1 ratio.
reserved
20 % Q1
Q2
Q3
Q4
Quarters in 2011
Q1
Q2
Q3
Q4
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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
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content and geographic areas worldwide.
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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.
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9
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Games
news
Computers & Electronics
Internet & Telecom
Shopping
Sports
People & Society
Jobs & Education
Books & Literature
Reference
Autos & Vehicles
Real Estate
Food & Drink
Business & Industrial
Beauty & Fitness
Finance
Travel
Health
Law & Government
Hobbies & Leisure
Pets & Animals
Home & Garden
Science
Impression Ranking
Online Communities
10%
Arts & Entertainment
Figure 2a
Ad impression year-on-year growth rates by vertical on the Ad Exchange and Google AdSense
year-on-year % Growth
40% 37%
30% 29%
25%
20%
11%
0
20% 24%
18%
13% 9% 11% 23%
17%
13%
0% -1% -1% 23% 22%
15%
11% 8%
4% 1%
10% -14%
-21% -25%
30%
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How do verticals rank by CPM?
For this report, CPM is defined as the amount a publisher
demand, some verticals command higher CPMs than others. Here, verticals
earns for delivering a thousand impressions through a
are indexed from highest to lowest CPM. Indexes are compiled from the
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
150
170 153
147
143
137
100
107
105
105
104
100
96
89
82
81
74
73
73
50
69
67 46
Law & Government
Autos & Vehicles
Books & Literature
Online Communities
Arts & Entertainment
Computers & Electronics
Sports
Finance
Games
People & Society
Internet & Telecom
Home & Garden
Science
Hobbies & Leisure
Real Estate
shopping
news
food & drink
Beauty & Fitness
pets & animals
reference
travel
Jobs & Education
Business & Industrial
Health
0
Real-Time Bidding Impact
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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.
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Which countries generate the most impressions?
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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 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
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opportunities for publishers.
This global map calls out the 2011 impression contributions of the top 25 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,
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respectively. We also observe that publishers located in EMEA are experiencing significant impression growth.
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Publishers included in this report come from 235 countries
More and more ad networks—of which Google AdSense is one—
and territories—from established, highly populated nations like
allow anyone with an internet connection and original content
Japan right through to the island country of Palau, one of the
to earn revenue as an online publisher, facilitating creation of
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
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Figure 2C
Impressions by country on the Ad Exchange and AdSense
canada
great britain
2.2%
4.2%
germany
4.9%
poland
2.5%
romania
0.9%
Ukraine
1.0%
south korea
russia
2.1%
china
1.8%
10.5%
Japan
5.7%
other
12.8%
U.S.
24.7% Argentina
0.9%
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brazil
3.2%
spain
3.1%
france
4.8%
belgium
0.6%
Netherlands Italy
2.4%
turkey
2.1% 2.5%
israel
0.8%
India
2.5%
thailand
0.7%
hong kong
1.2%
taiwan
1.0%
australia
0.9%
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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
160 140 120
165
2%
11% 130
125
39% 127
117
131
-16% 4%
100
76
79
94
0%
88
80
74
-33%
-8%
14%
60
56 40
43 29
20
36
41
40
56
37
0
U.S.
canada
great britain
germany
spain
france
Italy
Netherlands
israel
australia
% %Growth
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CPM Q3 Americas
CPM Q4 Americas
CPM Q3 EMEA
CPM Q4 EMEA
CPM Q3 apac
CPM Q4 apac
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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
3.
exclusive sizes that can be tailored to the needs of an individual advertiser, and standardized sizes that will accommodate creatives from the majority of advertisers and networks.
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Which ad sizes are growing in popularity?
300 x 250 Publishers make decisions on ad sizes based on the audience they wish to
728 x 90
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 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—
300 x 600
yet only 300 unique sizes posted more than 1 million impressions during 2011.
468 x 60
The growth in non-standard ad sizes is notable, and it has mostly been at 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 offer advertisers a richer visual canvas for their creatives.
300 x 100
160 x 600
88 x 31
120 x 600
336 x 280
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Figure 3a
Growth of top 10 ad sizes by impressions served through DFP and platforms
119%
120%
100%
80%
70% % of impressions
60%
40%
20%
% Growth Q1–Q4
33%
37%
32% 21%
18% 10%
13% 3%
20%
2%
728 x 90
160 x 600
468 x 60
2%
2%
1%
1%
0%
1%
-15%
-16%
300 x 250
2%
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.
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25
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
100
109 97
92
80
68
60
53 40
41 27
20
0
300 x 250
26
14
8
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
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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.
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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%.
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Figure 4a Global mobile web ad impression growth by vertical on the Ad Exchange and AdSense
69% 61% 47%
Shopping
39%
Food & Drink
36%
35%
People & Society
32%
31%
45%
45%
Reference
30%
Books & Literature
29%
28%
43%
Online Communities
28%
25%
41%
40%
40%
Law & Government
Internet & Telecom
Computers & Electronics
23%
22%
20%
19%
18% 9%
Games
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Arts & Entertainment
Science
Health
Pets & Animals
Jobs & Education
Hobbies & Leisure
Business & Industrial
Home & Garden
news
Finance
Real Estate
Beauty & Fitness
Sports
Autos & Travel Vehicles
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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
5.
brand advertisers, and partly due to tremendous viewer 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.
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Figure 5a
How do video ads impact viewers?
Video ad length
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 only 13% running less than 15 seconds. We’re also seeing a 175% increase in
15 to 30 seconds
51%
impressions on the 640 x 360 ad unit that fits wide-screen players. Conversely,
over 30 seconds
36%
less than 15 seconds
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%
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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.
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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
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