WW and US Internet Ad Spend Report 2Q 2013 IDC 2013Aug00

8/13/2019 WW and US Internet Ad Spend Report 2Q 2013 IDC 2013Aug00

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Filing Information: August 2013, IDC #242667, Volume: 1

Worldwide New Media Market Model: Update

U P D A T E

W o r l d w i d e a n d U . S . I n t e r n e t A d S p e n d R e p o r t 2 Q 1 3 :

F a c e b o o k O v e r t a k e s Y a h o o ! i n t h e U n i t e d S t a t e s

Karsten Weide

I N T H I S U P D A T E

This IDC update reports the total volume and growth rate of the worldwide, regional,

and U.S. Internet advertising spending for 2Q13 and forecasts U.S. growth for 3Q13

2Q14. It also reports the top U.S. new media companies' quarterly domestic ad sales,

growth rates, and market shares, as well as spending on major ad formats and their

growth rates and market shares.

A spreadsheet containing this document's data is available to IDC clients by request.

Follow Karsten Weide on Twitter: @KarstenW.

I D C O p i n i o n

Quarterly worldwide spending increased by 10.7% from $24.2 billion in 2Q12 to $26.8

billion in 2Q13. IDC also finds:

Quarterly U.S. spending expanded by 12.8% from $9.8 billion in 2Q12 to $11.1

billion in 2Q13. This is the second quarter in a row with a growth rate

substantially lower than those in 2012 (which had year-on-year rates of 1618%).

IDC therefore forecasts a moderate growth for 3Q13 of 13% to $11.7 billion and

predicts that spending for the entirety of 2013 will increase by 14.1% to $46.6billion. This weakness is largely caused by slow growth in the "traditional" online

search and display advertising businesses, perhaps partly caused by intense

advertiser interest in mobile advertising.

Facebook grew its U.S. revenue by 51% (an almost 20-point jump in growth

compared with that of the last quarter) from $450 million in 2Q12 to $680 million

in 2Q13. Because of that strong growth and continuing weak sales for Yahoo!,

Facebook has now taken over Yahoo! as fourth biggest publisher after Google,

eBay, and Microsoft in the United States (refer to Figures 10 and 11 and Tables

7 and 8). In terms of international sales, Facebook took over Yahoo! back in mid-

2011.

U.S. mobile advertising continues to grow very fast. Mobile search advertising

grew by 72.3% from $0.6 billion in 2Q12 to $1.1 billion in 2Q13. Mobile display

advertising grew by 71.5% from $0.4 billion in 2Q12 to $0.7 billion in 2Q13.

Growth in both mobile search and display advertising is so strong now that these

two formats have begun to eat into the market share of online search and display

advertising (refer to Table 4 and Figure 7). This is good news for players that are

strong in mobile (Google and Facebook) and more bad news for players that still

primarily rely on online ads (Microsoft, Yahoo!, AOL, and New York Times).

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2013 IDC #242667 3

T A B L E 1

Wor l d w i d e D i g i t a l Ad ve r t i s i n g Re ve nue b y Re g i on , 3Q092Q13 ( $B )

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

United States 6.5 7.3 7.1 7.3 7.6 8.4 8.0 8.5 8.7 9.8 9.4 9.8 10.3 11.4 10.7 11.1

Year-over-year growth (%) -2.1 2.3 11.3 16.5 17.2 15.3 13.8 15.3 14.3 16.4 17.3 15.8 17.6 16.3 13.4 12.8

Canada 0.4 0.4 0.5 0.5 0.5 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.6 0.6

Year-over-year growth (%) 19.2 24.6 24.3 30.1 30.9 28.8 14.4 16.0 15.0 17.0 9.2 7.9 9.5 8.3 4.9 4.4

Western Europe 4.9 5.5 5.0 5.2 5.4 6.0 6.0 6.3 6.5 7.3 6.1 6.4 6.7 7.4 6.6 6.8


Japan 1.7 1.9 1.9 2.0 2.1 2.3 2.1 2.3 2.3 2.6 2.2 2.3 2.4 2.7 2.2 2.3

Year-over-year growth (%) 21.9 27.4 14.4 19.7 20.4 18.5 12.9 14.4 13.4 15.5 4.1 2.8 4.4 3.2 -2.5 -3.0

Asia/Pacific (excluding Japan) 1.5 1.7 2.0 2.0 2.1 2.3 2.6 2.7 2.8 3.2 3.3 3.5 3.6 4.0 4.0 4.1


Central and Eastern Europe 0.4 0.5 0.5 0.5 0.5 0.6 0.8 0.8 0.9 1.0 0.9 0.9 1.0 1.1 1.0 1.1

Year-over-year growth (%) -14.0 -10.2 22.7 28.4 29.2 27.1 57.1 59.2 57.8 60.6 13.9 12.4 14.1 12.9 15.8 15.2

Middle East and Africa 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3


Latin America 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5


Worldwide 15.8 17.6 17.3 18.0 18.8 20.6 20.7 21.8 22.5 25.2 23.3 24.2 25.4 28.1 25.9 26.8


Note: International growth rates include currency exchange rate influences.

Source: IDC, 2013


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4 #242667 2013 IDC

U.S. Development

Figure 2 shows absolute digital advertising spending in the United States; Figure 3

outlines year-on-year growth rates for each quarter.

F I G U R E 2

U . S . D i g i t a l A d v e r t i s i n g R e v e n u e , 4 Q 0 7 2 Q 1 3

Source: IDC, 2013

F I G U R E 3

U . S . D i g i t a l A d v e r t i s i n g R e v e n u e Y e a r - o n - Y e a r G r o w t h , 4 Q 0 7 2 Q 1 3

Source: IDC, 2013


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F I G U R E 5

U . S . D i g i t a l A d v e r t i s i n g R e v e n u e G r o w t h b y F o r m a t , 4 Q 0 7 2 Q 1 3

Note: Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads,

video ads, and interstitials.

Source: IDC, 2013

F I G U R E 6

U . S . M o b i l e O n l i n e A d s R e v e n u e G r o w t h , 4 Q 0 7 2 Q 1 3

Note: Mobile ads do not include SMS/MMS ads.

Source: IDC, 2013


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2013 IDC #242667 7

T A B L E 3

U . S . D i g i t a l Ad ve r t i s i n g Re ve nue G r ow th b y Fo r ma t , 3Q092Q13 ( $B )


Online search ads 3.6 4.0 3.8 3.8 3.9 4.2 3.9 3.9 4.0 4.4 4.4 4.5 4.6 5.1 4.6 4.7

Year-over-year growth (%) -3.7 2.3 7.7 10.7 8.9 5.4 1.4 2.1 1.2 6.2 11.9 14.8 15.9 14.5 5.5 4.3

Online display ads 1.8 2.1 2.0 2.2 2.2 2.5 2.4 2.6 2.6 2.9 2.8 2.9 3.0 3.3 3.0 3.0


Mobile search ads 0.1 0.1 0.1 0.2 0.2 0.2 0.3 0.4 0.4 0.5 0.6 0.6 0.7 0.8 1.0 1.1


Mobile display ads 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.4 0.5 0.5 0.6 0.7


Classified ads 0.7 0.7 0.7 0.7 0.7 0.8 0.6 0.7 0.7 0.8 0.7 0.7 0.7 0.8 0.8 0.8

Year-over-year growth (%) -20.8 -18.9 -4.9 5.1 4.8 8.3 -6.5 -0.6 -1.9 0.1 7.3 4.9 6.8 6.1 13.4 12.8

Other ads 0.4 0.4 0.4 0.5 0.5 0.6 0.7 0.8 0.8 0.9 0.7 0.7 0.7 0.8 0.8 0.8

Year-over-year growth (%) 0.0 -1.6 15.3 25.8 32.3 32.9 78.5 67.3 64.2 58.4 -2.4 -12.5 -10.3 -10.8 13.4 12.8

Notes:

Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video ads, and interstitials.

Mobile ads do not include SMS/MMS ads.

Source: IDC, 2013


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F I G U R E 7

U . S . D i g i t a l A d v e r t i s i n g R e v e n u e S h a r e b y F o r m a t , 4 Q 0 7 2 Q 1 3

Notes:

Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video

ads, and interstitials.


Source: IDC, 2013


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2013 IDC #242667 9

T A B L E 4

U . S . D i g i t a l Ad ve r t i s i n g Re ve nue Sha r e b y Fo r ma t , 3Q092Q13 (%)


Online search ads 55.4 54.4 54.4 51.9 51.5 49.7 48.4 45.9 45.6 45.4 46.2 45.5 44.9 44.7 43.0 42.1

Online display ads 27.2 28.2 28.2 29.4 29.3 30.2 29.7 30.5 30.1 29.9 30.1 29.7 29.3 29.2 28.1 27.6

Mobile search ads 1.0 1.2 1.7 2.1 2.5 3.0 3.9 4.5 5.1 5.2 6.0 6.5 7.0 7.3 9.0 10.0

Mobile display ads 0.6 0.7 0.9 1.0 1.2 1.3 1.7 1.9 2.3 2.6 3.5 4.1 4.5 4.7 5.7 6.2

Classified ads 10.1 9.6 9.4 9.1 9.1 9.0 7.7 7.8 7.8 7.7 7.1 7.1 7.1 7.1 7.1 7.1

Other ads 5.7 5.9 5.4 6.5 6.5 6.8 8.5 9.4 9.3 9.2 7.1 7.1 7.1 7.1 7.1 7.1

Notes:

Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video ads, and interstitials.


Source: IDC, 2013


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U.S. Top New Media Companies

Table 5 lists the estimated quarterly U.S. net revenue numbers for the top new media

companies and their advertising partners. Figures 8 and 9 and Table 6 show the net

U.S. digital advertising growth rates for the same entities.


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2013 IDC #242667 11

T A B L E 5

U . S . D i g i t a l Ad ve r t i s i n g Ne t Re ve nue ( E x c l u d i ng TAC ) b y En t i t y , 3Q092Q13 ( $B )


Google 1.98 2.24 2.25 2.33 2.52 2.93 2.93 3.04 3.24 3.63 3.53 3.62 3.80 4.18 4.04 4.07

Google ad partners 0.47 0.54 0.54 0.57 0.66 0.77 0.71 0.73 0.78 0.90 0.87 0.91 1.01 1.10 1.02 1.02

eBay 0.58 0.55 0.54 0.58 0.61 0.58 0.62 0.67 0.66 0.66 0.71 0.73 0.74 0.79 0.80 0.83

Microsoft 0.40 0.44 0.42 0.44 0.42 0.50 0.48 0.51 0.49 0.57 0.51 0.58 0.57 0.65 0.61 0.62

Microsoft ad partners 0.00 0.00 0.01 0.02 0.02 0.05 0.05 0.07 0.07 0.08 0.07 0.08 0.08 0.10 0.09 0.10

Facebook 0.14 0.18 0.21 0.24 0.26 0.34 0.31 0.37 0.37 0.43 0.39 0.45 0.51 0.59 0.52 0.68

Yahoo! 0.71 0.79 0.72 0.71 0.71 0.76 0.65 0.64 0.62 0.70 0.65 0.65 0.67 0.74 0.64 0.64

Yahoo! ad partners 0.24 0.27 0.25 0.25 0.26 0.09 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.02

IAC 0.12 0.13 0.14 0.14 0.13 0.14 0.16 0.16 0.16 0.19 0.22 0.22 0.24 0.26 0.26 0.28

IAC ad partners 0.03 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.04 0.05

AOL 0.23 0.26 0.23 0.21 0.21 0.23 0.22 0.22 0.21 0.25 0.22 0.23 0.22 0.27 0.23 0.23

AOL ad partners 0.08 0.10 0.07 0.05 0.05 0.06 0.06 0.07 0.07 0.07 0.08 0.08 0.08 0.09 0.08 0.08

YP 0.21 0.22 0.22 0.24 0.24 0.25 0.22 0.24 0.24 0.25 0.22 0.24 0.24 0.25 0.22 0.24

Walt Disney (DIMG) 0.06 0.06 0.06 0.06 0.06 0.07 0.07 0.08 0.08 0.09 0.08 0.09 0.09 0.10 0.08 0.09

DIMG = Disney Interactive Media Group

TAC = traffic acquisition costs

Notes:

Google ad partners net TAC payouts to AOL and IAC.

Microsoft ad partners net TAC payout to Facebook.

Yahoo! ad partners net TAC payout to eBay.

All fiscal quarters are normalized to calendar quarters.

Source: IDC, 2013


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F I G U R E 8

U . S . D i g i t a l A d v e r t i s i n g N e t R e v e n u e G r o w t h ( E x c l u d i n g T A C ) b y C o m p a n y ,

4 Q 0 7 2 Q 1 3


Source: IDC, 2013

F I G U R E 9

U . S . D i g i t a l A d v e r t i s i n g N e t R e v e n u e G r o w t h ( E x c l u d i n g T A C ) o f F a c e b o o k ,

1 Q 0 9 2 Q 1 3


Source: IDC, 2013


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2013 IDC #242667 13

T A B L E 6

U . S . D i g i t a l Ad ve r t i s i n g Ne t Re ve nue G r ow th ( E x c l u d i ng TAC ) b y En t i t y , 3Q092Q13 (%)


AOL -11.6 -12.8 -12.3 -11.3 -11.7 -10.4 -4.9 1.7 3.7 8.2 2.3 4.2 3.3 8.0 3.9 3.1

AOL ad partners -5.2 0.8 -12.9 -36.7 -34.8 -37.1 -16.0 31.1 29.5 21.8 23.9 17.5 15.5 27.7 7.1 7.7

eBay 1.4 -0.3 -2.4 7.6 4.0 5.7 14.6 15.3 8.3 14.4 13.9 8.3 12.3 18.4 13.1 14.0

Facebook 174.7 158.1 160.8 127.9 86.4 82.3 47.3 50.4 41.4 28.6 27.2 22.5 37.3 37.6 32.1 51.0

Google 4.8 11.8 20.7 27.0 27.3 30.9 30.2 30.5 28.5 24.0 20.7 18.9 17.3 15.0 14.3 12.5


IAC -1.6 10.5 33.2 24.7 10.6 8.3 12.6 14.6 24.1 37.9 39.1 41.4 44.8 38.1 19.0 27.1

IAC ad partners -12.5 -0.1 10.8 24.7 38.9 18.7 23.8 14.6 8.7 14.1 -18.9 -17.6 -15.6 -7.1 19.0 27.1

Microsoft -9.6 -14.9 5.7 11.1 6.3 14.0 12.5 15.7 17.2 12.5 8.3 13.3 15.6 14.7 18.0 6.8

Microsoft ad partners -66.3 -81.3 -9.2 124.9 443.0 1,518.7 494.4 312.7 186.3 82.4 33.8 14.7 13.3 18.3 25.5 33.8

Walt Disney (DIMG) -18.8 -7.0 14.8 10.8 16.8 17.2 20.7 39.0 27.7 19.5 10.2 8.0 15.2 13.8 5.9 0.4

Yahoo! -14.9 -10.9 -3.7 -1.1 0.6 -4.5 -10.8 -11.0 -13.7 -7.5 1.1 2.2 8.9 5.8 -2.4 -1.9

Yahoo! ad partners 1.9 5.0 5.2 8.2 9.7 -68.2 -88.4 -88.2 -89.2 -62.4 8.9 10.7 1.2 3.1 -39.9 -40.3

YP -2.3 -2.3 14.3 14.3 14.3 14.3 NA NA NA NA NA NA NA NA NA NA



Notes:




Source: IDC, 2013


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Figures 10 and 11 and Table 7 show the estimated net U.S. market shares (excluding

traffic acquisition costs [TAC]) for the top new media companies.

Table 8 presents the estimated gross U.S. market shares (including TAC) for the top

new media companies.

F I G U R E 1 0

U . S . D i g i t a l A d v e r t i s i n g N e t R e v e n u e S h a r e ( E x c l u d i n g T A C ) o f G o o g l e ,

4 Q 0 7 2 Q 1 3


Source: IDC, 2013


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2013 IDC #242667 15

F I G U R E 1 1

U . S . D i g i t a l A d v e r t i s i n g N e t R e v e n u e S h a r e ( E x c l u d i n g T A C ) b y C o m p a n y ,

4 Q 0 7 2 Q 1 3



Source: IDC, 2013


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16 #242667 2013 IDC

T A B L E 7

U . S . D i g i t a l Ad ve r t i s i n g Ne t Re ve nue Sha r e ( E x c l u d i ng TAC ) b y En t i t y , 3Q092Q13 (%)


Google 30.4 30.7 31.8 31.8 33.0 34.9 36.4 35.9 37.1 37.1 37.5 36.9 37.0 36.7 37.8 36.8


eBay 8.9 7.5 7.7 7.9 7.9 6.9 7.7 7.9 7.5 6.8 7.5 7.4 7.2 6.9 7.5 7.5

Microsoft 6.1 6.1 6.0 6.0 5.5 6.0 5.9 6.0 5.7 5.8 5.5 5.9 5.6 5.7 5.7 5.6

Microsoft ad partners 0.1 0.0 0.1 0.2 0.3 0.5 0.6 0.8 0.8 0.9 0.7 0.8 0.8 0.9 0.8 0.9

Facebook 2.1 2.5 3.0 3.3 3.4 4.0 3.9 4.4 4.2 4.4 4.2 4.6 4.9 5.2 4.9 6.2

Yahoo! 10.9 10.9 10.3 9.7 9.4 9.0 8.0 7.5 7.1 7.2 6.9 6.6 6.5 6.5 6.0 5.8

Yahoo! ad partners 3.6 3.7 3.6 3.4 3.4 1.0 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2

IAC 1.8 1.8 2.0 1.9 1.7 1.7 1.9 1.8 1.9 2.0 2.3 2.3 2.3 2.3 2.4 2.5

IAC ad partners 0.5 0.5 0.5 0.5 0.6 0.5 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4

AOL 3.6 3.5 3.2 2.9 2.7 2.8 2.7 2.6 2.4 2.6 2.3 2.3 2.2 2.4 2.1 2.1

AOL ad partners 1.2 1.3 1.0 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.7

YP 3.2 3.0 3.2 3.2 3.1 3.0 2.8 2.8 2.7 2.6 2.4 2.4 2.3 2.2 2.1 2.1

Walt Disney (DIMG) 0.8 0.9 0.8 0.8 0.8 0.9 0.9 1.0 0.9 0.9 0.8 0.9 0.9 0.9 0.8 0.8



Notes:




Source: IDC, 2013


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2013 IDC #242667 17

T A B L E 8

U . S . D i g i t a l Ad ve r t i s i n g G r o s s Re ve nue Sha r e ( I n c l u d i ng TAC ) b y En t i t y , 3Q092Q13 (%)


Google 37.6 38.1 39.4 39.6 41.6 44.0 45.3 44.6 46.1 46.4 46.8 46.2 46.9 46.4 47.4 46.1

eBay 8.9 7.5 7.7 7.9 7.9 6.9 7.7 7.9 7.5 6.8 7.5 7.4 7.2 6.9 7.5 7.5

Microsoft 6.2 6.1 6.1 6.2 5.8 6.5 6.5 6.8 6.5 6.7 6.2 6.7 6.3 6.6 6.5 6.5

Facebook 2.1 2.5 3.0 3.3 3.4 4.0 3.9 4.4 4.2 4.4 4.2 4.6 4.9 5.2 4.9 6.2

Yahoo! 14.5 14.6 13.8 13.1 12.8 10.0 8.4 7.9 7.4 7.5 7.3 7.0 6.8 6.8 6.1 5.9

IAC 2.3 2.2 2.5 2.4 2.3 2.1 2.5 2.4 2.4 2.4 2.7 2.6 2.7 2.7 2.8 3.0

AOL 4.8 4.9 4.3 3.6 3.4 3.5 3.5 3.3 3.2 3.3 3.2 3.1 2.9 3.2 2.9 2.9

YP 3.2 3.0 3.2 3.2 3.1 3.0 2.8 2.8 2.7 2.6 2.4 2.4 2.3 2.2 2.1 2.1

Walt Disney (DIMG) 0.8 0.9 0.8 0.8 0.8 0.9 0.9 1.0 0.9 0.9 0.8 0.9 0.9 0.9 0.8 0.8

DIMG = Disney Interactive Media GroupTAC = traffic acquisition costs

Source: IDC, 2013


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Figure 12 shows the gross and net U.S. digital advertising revenue market shares of

the top media companies in 1Q13 (with segmentation for net revenue and TAC).

F I G U R E 1 2

U . S . D i g i t a l A d v e r t i s i n g R e v e n u e S h a r e b y E n t i t y , 2 Q 1 3



Notes:

Google TAC net TAC payouts to AOL and IAC.

Microsoft TAC net TAC payout to Facebook.

Yahoo! TAC net TAC payout to eBay.

Source: IDC, 2013

Figure 13 and Table 9 show the major players' U.S. net revenue shares in searchadvertising. Figure 14 and Table 10 present the major players' U.S. net revenue

shares in display advertising.


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F I G U R E 1 3

U . S . O n l i n e S e a r c h A d v e r t i s i n g N e t R e v e n u e S h a r e ( E x c l u d i n g T A C )

b y E n t i t y , 4 Q 0 7 2 Q 1 3

Source: IDC, 2013


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T A B L E 9

U . S . On l i n e S e a r c h Ad ve r t i s i n g Ne t Re ve nue Sha r e ( E x c l u d i ng TAC ) b y En t i t y , 3Q092Q13 (%)


Google 50.3 51.4 50.9 50.8 51.7 56.4 58.7 57.8 58.8 60.0 59.0 56.1 56.4 57.9 60.5 57.9

Microsoft 5.5 5.6 6.3 6.9 6.9 6.8 7.9 8.4 8.8 8.7 9.5 9.7 9.8 9.7 11.3 11.7

Yahoo! 9.8 9.3 9.2 9.1 8.6 7.8 7.0 7.1 6.8 6.2 6.6 6.2 6.5 6.1 6.4 6.2

IAC 3.0 2.9 3.3 3.2 3.0 3.0 3.6 3.6 3.7 3.9 4.5 4.5 4.6 4.7 5.1 5.5

AOL 3.1 2.9 2.5 2.4 2.2 2.1 2.0 2.0 1.9 1.8 1.8 1.7 1.7 1.7 1.8 1.7

eBay 0.8 0.3 0.7 1.0 1.0 0.6 1.2 1.8 1.3 0.7 1.3 1.7 1.2 0.7 1.3 1.6


Source: IDC, 2013


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2013 IDC #242667 21

F I G U R E 1 4

U . S . O n l i n e D i s p l a y A d v e r t i s i n g N e t R e v e n u e S h a r e ( E x c l u d i n g T A C )

b y E n t i t y , 4 Q 0 7 2 Q 1 3

Source: IDC, 2013


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T A B L E 1 0

U . S . On l i n e D i s p l a y Ad ve r t i s i n g Ne t Re ve nue Sha r e ( E x c l u d i ng TAC ) b y En t i t y , 3Q092Q13 (%)


Google 6.7 6.7 10.9 13.4 15.6 15.8 18.8 20.9 22.4 21.1 21.6 23.5 23.5 21.3 24.1 25.0

Yahoo! 16.0 17.2 15.4 14.5 14.2 15.0 13.8 12.4 11.6 13.0 11.4 11.4 10.8 11.5 9.9 10.1

Facebook 5.5 6.2 7.3 7.8 8.1 9.1 9.7 10.7 10.6 11.1 11.0 11.4 11.0 10.1 9.2 9.4

AOL 6.9 7.0 6.5 5.5 5.3 5.7 5.8 5.4 5.3 5.9 5.0 5.2 4.7 5.5 4.9 5.0

Walt Disney (DIMG) 3.1 3.1 3.0 2.8 2.9 2.9 3.0 3.3 3.1 3.0 2.8 3.1 3.1 3.0 2.8 3.0

Microsoft 11.1 10.7 9.0 8.2 6.7 8.6 7.0 7.1 5.5 6.2 3.6 5.1 3.9 4.8 3.0 2.5

IAC 0.7 0.6 0.7 0.7 0.6 0.6 0.7 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.8 0.9

eBay 1.4 1.3 1.1 1.1 1.1 0.5 0.3 0.3 0.3 0.4 0.3 0.4 0.4 0.5 0.6 0.5



Source: IDC, 2013


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2013 IDC #242667 23

F u t u r e O u t l o o k

IDC forecasts U.S. spending will grow by 13% to $11.7 billion in 3Q13 and predicts

spending for the entirety of 2013 will increase by 14.1% to $46.6 billion.

E s s e n t i a l G u i d a n c e

Sales in the second quarter continued the sluggish growth that began in 1Q13; the

economic outlook for both the United States and the world remains uncertain, and

IDC expects slow growth to continue. Weak growth is caused by slow sales in online

ads, whereas mobile ads continue to grow at a breakneck pace.

L E A R N M O R E

R e l a t e d R e s e a r c h

Worldwide New Media Market Model, 1H13: Worldwide and U.S. Data (IDC

#242211, June 2013)

Worldwide and U.S. Internet Ad Spend Report 1Q13: Slow First Quarter, Muted

2013 Outlook(IDC #241094, May 2013)

M e t h o d o l o g y

This IDC update tracks the total volume and growth rate of the worldwide, regional,

and U.S. Internet advertising spending for the preceding quarter and forecasts U.S.

growth for the succeeding four quarters. It also reports the top U.S. new media

companies' quarterly domestic ad sales, growth rates, and market shares as well as

spending on major ad formats and their growth rates and market shares.

For U.S. companies' numbers, this document for the most part ignores that share of

the revenue called traffic acquisition costs (TAC). Some of the companies this

document covers run networks of third-party Web sites on which they sell ad space,

thereby generating additional revenue. Traffic acquisition costs are the part of this

revenue that they pay out to the partners in their networks. We call revenue including

TAC gross revenue and revenue excluding TAC net revenue. As far as particular

companies' results are concerned, this document almost exclusively discusses net

revenue because that is the amount of money that remains with a company, is at its

disposal, and influences its future capabilities and competitiveness. We do, however,

address gross revenue at some points because it is a measure of control over the

market.

This document is based on a model that is populated with data from companies'

quarterly and annual reports, earnings calls, interviews with company representatives,

news coverage, and estimates.


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24 #242667 2013 IDC

To calculate the net U.S. Internet advertising sales market shares, the model looks at

the quarterly total gross Internet advertising revenue of the following top U.S. new

media operations:

AOL

eBay

Facebook

Google

IAC

Microsoft (Online Services Division [OSD] plus ad revenue in the Windows Live

division)

Walt Disney

Yahoo!

YP

Where detailed numbers are not available, the model calculates revenue and market

shares as follows: From the companies' total gross advertising revenue, the model

first subtracts TAC (where applicable), thus arriving at their total net revenue. From

this total net revenue, it then subtracts the international portion of each company's

sales (where applicable). This way, the model arrives at the net U.S. advertising

revenue (excluding TAC) of each company. By adding each company's revenue, we

arrive at their total U.S. Internet advertising revenue.

In the next step, the model estimates the total U.S. Internet advertising volume byassuming that the top companies stand for about 80% of the market that is, that

the residual, long-tail market represents 20%. Then the model calculates the market

share of each major company by expressing it in relation to the overall market

volume.

To forecast U.S. ad spending for 2Q131Q14, the model assumes that growth rates

follow a historically established exponential decay curve as the digital ad market

matures, adjusted by the leading economic indicator for the United States as made

available by the University of Ohio.

To estimate current spending on search ads, display ads (comprising display ads

proper [such as banner and rectangle ads], rich media ads, video ads, andinterstitials), classifieds, and "other" ads, the model follows a similar approach as

described for overall digital ad spending previously. It also establishes each ad

format's growth rate and market share.

The model estimates quarterly ad spend in Western Europe, Japan, Asia/Pacific

(excluding Japan) (APEJ), Canada, Central and Eastern Europe (CEE), Middle East

and Africa (MEA), and Latin America based on the forecast of the Worldwide New

Media Model and Forecast (NMMM), adjusted with data on recent spending.


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All numbers are nominal (current) dollar amounts as they report actual current

spending. All growth rates in this document are annual (year-on-year) growth rates.

For the sake of comparability, any data relating to companies not on calendar

business years (Microsoft and Walt Disney) is normalized to calendar quarters. For

example, when we talk about Microsoft's third-quarter results, we mean the third

calendar quarter of a given year, not Microsoft's third fiscal quarter.

The ad spend report model is continuously being updated and modified to improve

estimates; companies' restated results are corrected and errors are fixed. Numbers

are therefore liable to change. In this edition, the following changes were made:

Updated forecast 2013 regional total digital advertising numbers based on most

recent numbers in latest New Media Market Model (1H13)

Broke out mobile search and display ad spending and their respective market

shares

C o p y r i g h t N o t i c e

This IDC research document was published as part of an IDC continuous intelligence

service, providing written research, analyst interactions, telebriefings, and

conferences. Visit www.idc.com to learn more about IDC subscription and consulting

services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please

contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or

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Copyright 2013 IDC. Reproduction is forbidden unless authorized. All rights reserved.

Documents

WW and US Internet Ad Spend Report 2Q 2013 IDC 2013Aug00