the international state of programmatic

THE INTERNATIONAL STATE OF PROGRAMMATIC

BETTER, SMARTER, FASTER: LOOKING AHEAD TO AN AUTOMATED FUTURE

April 2014

MAGNA GLOBAL

© 2014 MAGNA GLOBAL, Inc. All Rights ReservedAll property, including trademarks, are the property of their respective owners and have, as applicable, been licensed for use.

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14THE PROGRAMMATIC NECESSITY

TABLEOF CONTENTS

No wonder ‘programmatic’ was 2013’ s marketing

buzzword of the year! Behind are the days when we had

the option to procrastinate or even decline

programmatic. Born out of necessity to harness the

infinite display inventory, programmatic trading is here

to stay.

Programmatic allows marketers, media owners and

agencies to invest more on higher-touch, higher-value

solutions that drive client business results, and less

on transactional, time-consuming and low - value

processes like requesting proposals, and matching

invoices.

Advertisers are quickly adopting programmatic because

it provides an unprecedented level of choice over

inventory. The newly acquired capacity of continued

adjustment in campaign settings – where measurability

is nearly in real-time - is what makes programmatic

so essential to the marketer of today. Advertisers are no

longer approaching programmatic as a segment

of their overall strategy; data and targeting permeate all

aspects of digital planning. Brands are demanding that

media owners make their inventory available

for programmatic.

Media owners see programmatic as the instant access

to millions of ad dollars that their sales force would have

never reached otherwise. The maximization of inventory,

the revenue streams and the visibility – transparency -

about what is being bought, by whom and what the fair

price is for their inventory is redefining their commercial

model.

As a marketer who has been on both sides of the table

– client and agency – I strongly agree with many who

suggest that programmatic is the transformative force

in the industry. However, the human factor – the brilliant

minds behind programmatic campaigns – is what makes

programmatic achieve its maximum potential.

Programmatic is young and in constant evolution, thus,

in some cases misconceived, but it’s here to stay and

now is the time to embrace it.

Shaffia Sanchez, President, MAGNA GLOBAL,

World Markets

Page 04INTERNATIONAL MARKETSIn the near future the majority of non-premium inventory will be transacted through programmatic

Page 10LATIN AMERICAProgrammatic will represent 35% of total display spend in Latin America in 2014

Page 16DEVELOPING ASIAProgrammatic spend will be $501mm in 2014

2NORDICS AND CEE Programmatic will represent 52% of display spend by 2018.

* Markets covered in this study include Argentina, Brazil, Chile, Colombia, Czech Republic, Denmark, Ecuador, Indonesia, Hong Kong, Hungary,

Korea, Malaysia, Mexico, Peru, Poland, Portugal, Philippines, Romania, Serbia, Singapore, Sweden, Taiwan, Thailand and Vietnam.

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DEFINITION

Driven by advanced technology and streamlining the traditional mediabuying workflow...

RTB

01

02

03

04

05

06

NRTB

Integrated with, and empowered by, media usage and consumer data...

Capable of adressing discrete impressions as opposedto packages of impressions, in a cost efficient way...

Targeting specific demographic groups or behavioral groups while being vendor-agnostic and content-agnostic...

Can be bought in "real-time", allowing feed-back loop and continued adjustment in campaign settings...

Matches demand and supply from multiple vendors and multiple buyers through bidding mechanisms...

While ‘programmatic’ was 2013’s marketing buzzword of the year, the term itself has been used in various ways since its inception and continues to evolve. To us, the difference between RTB and non-RTB (automated) transactions within programmatic can be recognized by whether the transaction is …

Traditional Buying: Purchase a bucket of impressions based on assumptions about a website’s readers

80 $

Programmatic Buying: Select individual impressions based on the value of each specific consumer

• Traditional buying costly to scale to a modern online advertising environment.

• Programmatic buying allows for consumer targeting at scale. Efficiencies are increased by outsourcing most of the heavy lifting to computer search algorithms.

Reasons for selection: • Retargeting / Pretargeting • Demographic Statistics • Audience specific info

2 $ 3 $ 4$6 $3$

3 $

3 $

2 $

2 $

4 $ 6 $4 $ 5 $

PROGRAMMATIC IN INTERNATIONAL MARKETS

WHAT IS PROGRAMMATIC?



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14WHAT INVENTORY WILL MIGRATE TO PROGRAMMATIC?

WHY BUY MEDIA PROGRAMMATICALLY?

For Advertisers

Drivers

For Publishers

Inhibitors

Enhanced targeting capabilities as consumers can be narrowed down beyond simple website demographics.

Successful programmatic markets in more developed regions have shown undeveloped markets the benefits of programmatic.

Access to new audiences in a fast & easy manner.

Surplus of inventory and untapped opportunities.

Tech infrastructure improvements as western programmatic companies expand into less developed markets.

Increased control over which consumers they're targeting and for what price.

Reduced costs as programmatic campaigns see higher CTR and conversion rates for the same dollars spent.

Improved reach and frequency as programmatic buying scales better than traditional buying methods.

Reduced waste as impressions that aren't valuable aren't being purchased.

Instant access to millions of ad dollars that their sales force isn't currently reaching.

Lack of programmatic education, both for brands and publishers.

Underdeveloped audience data availability.

Worries around arbitrage in what is at least at first an opaque and not well understood system.

Fear of cannibalization of direct sales.

Increased transparency about what is being bought and by whom and what the fair price is for each piece of inventory.

Reduced overhead by minimizing the publishing sales force; programmatic selling requires less manpower.

Maximize value of inventory by selling at real-time market rates and increasing yield.

New revenue streams by monetizing proprietary 1st party information as well as by exposing one’s brand to advertisers that are not endemic to one’s sector (i.e. auto to auto).

01

02

03

04

Remnant

inventory

Mid-tier

inventory

Customized & ‘native’

campaigns

Non-standard campaigns are the only form of

display advertising that will remain largely

untouched by automated buying mechanisms.

Premium formats are starting to be

transacted programmatically. Little of

it will be fully RTB, at least at first.

Within 5 years in the US

(a bit longer elsewhere) the

overwhelming majority of

non-premium inventory

will be transacted

through programmatic,

primarily

through RTB.

Premium

formats

• The top 10 programmatic markets are growing by 39% this year, while the others will grow by 57% and the smallest 10 will grow by 66%.

• The top 10 RTB markets are growing by a healthier 47% this year, while the other markets will grow by 109% and the smallest 10 markets will grow by 243%.

• RTB penetration in many growth markets will reach the same levels as in many of the largest markets in each region. Publishers and brands alike are interested and enthusiastic about transacting more efficiently.

– Colombia’s RTB penetration will match that of Brazil and Mexico.

– Malaysia and Singapore’s RTB penetration will lead those of developing APAC, and surpass that of China.

– Hungary will grow rapidly and approach the penetration levels of Sweden and Denmark.

• A successful programmatic infrastructure isn’t built overnight, and the lessons learned from well-developed programmatic markets translate to the small growth markets: publishers and brands that wait to commit to programmatic are left playing catch-up and missing many of the efficiency gains seen by first movers.

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INTERNATIONAL MARKET SIZE OF PROGRAMMATIC

Serbia

Czech Republic

Sweden

Romania

Poland

Netherlands

Portugal

Spain

France

Hungary

Denmark

Germany

United Kingdom

Ecuador

Chile

Argentina

Peru

Colombia

Mexico

Brazil

Vietnam

Singapore

Korea

Philippines

Hong Kong

Australia

Thailand

Indonesia

China

Taiwan

Malaysia

Japan

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European Total Programmatic Spend ($mm)

Latam Total Programmatic Spend ($mm)

European RTB Spend ($mm)

Latam RTB Spend ($mm)

APAC Total Programmatic Spend ($mm) APAC RTB Spend ($mm)

2014 REGIONAL PROGRAMMATIC MARKET SHARE

N. America

APAC

W Europe

Latin America

C & E Europe

20%61%

14%

4% 1%

RTB

18%

57%

16%

5%

3%

Total programmatic



• Programmatic spend in Latin America* (both RTB and non-RTB programmatic) will be $836mm in 2014, up from $502mm last year (67% growth).

• RTB spend in Latin America will be $177mm in 2014, up from $53mm last year (232% growth).

– Social represents the majority of non-RTB programmatic spend in Latin America.

• Brazil is the largest programmatic market in Latam, representing $466mm total dollars, and $94mm RTB dollars in 2014.

– Brazil is followed by Mexico and Argentina as the largest programmatic markets in the region.

• Desktop display represents 93% of total RTB spend, with the remaining 7% representing video and mobile RTB.

– Video and mobile RTB will take share from desktop due to higher growth rates through 2018, although desktop display RTB will remain the majority of spend even in 2018.

• Programmatic including both RTB and non-RTB purchases will represent 35% of total display spend in Latin America in 2014. This will expand to 61% by 2018.

– RTB will represent 7% of total display spend in 2014, and this will expand to 23% of total display spend by 2018 in Latin America.

• CPMs are low and average ~60-80c although it varies depending on what inventory is being targeted. This compares to non-programmatic average display CPMs of $6.10 in Latin America. Non-programmatic purchases, however, are typically higher value premium inventory.

– While programmatic trading has a slight overall deflationary effect on digital CPMs, in more developed markets we see CPMs continuing to increase on average as more and more premium inventory enters the programmatic pool.

* Latin American markets in this study include: Argentina, Brazil,

Chile, Colombia, Ecuador, Mexico and Peru.

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ECOSYSTEM IN LATAM

• The programmatic ecosystem is primarily comprised of larger Western companies that have expanded to the region, rather than smaller local start-ups as we see in the largest APAC markets.

• Brands and publishers are receptive to programmatic although lacking some understanding; they’re used to transparency and will have to weigh the efficiency increases that programmatic offers against the opacity of programmatic transactions.

PUBLISHERS

• Infrastructure is expanding rapidly; global holding companies are moving trading desks into local markets.

• Prices still vary significantly for programmatic inventory, from as low as 10c CPMs for unsold remnant to as high as $20 for premium video.

– Adding a data layer to inventory can cost as much as $ 1 - 2 CPM to compensate DMPs. – 1st and 3rd party databases will be just as important to the development of Latin American programmatic as they have been in larger markets. – 3rd party providers such as NavEgg and DataXpand are just building up the Latin American data provider market.

• In some markets the dominant media owners are reluctant to change and can force advertisers to combine digital media buys with traditional buys on an RFP basis.

– The biggest media owners (Universal in Mexico, Tiempo in Colombia, Clarin in Argentina, El Mercurio in Chile, Globo in Brazil etc.) could potentially build their own private exchanges to maintain control.

XaxisCadreonAccuen VivakiOthers

* Latin American markets in this study include: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru.

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SHARE BY COUNTRY

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Peru

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Latam Programmatic Market Share (%)

Latam RTB Market Share (%)

201620132012 20172014 20182015

• Brazil and Mexico are the largest markets by total spend (as their digital markets are also the largest in

the region).

• By market share, however, there is more similarity across the region than there is by raw dollars.

• RTB shares in Latin America will surpass 25% of total display spend by 2017 in several of the largest

Latin American markets; while this doesn’t compare to the 40%+ of Western European markets and the

US, it’s still a big leap forward in a small amount of time.

PROGRAMMATIC SHARES IN LATIN AMERICA

SPEND BY COUNTRY

2012 20122013 20132014 20142015 20152016 20162017 20172018 2018

2.0 0.8

2.5 1.0

3.0 1.2

4.0 1.6

3.5 1.4

1.5 0.6

1.0 0.4

0.5 0.2

0 0

Latam Programmatic Spend ($bn) Latam RTB Spend ($bn)

• The expansion of the programmatic market into Latin America is a recent phenomenon as elements of the

ecosystem come into existence.

• The market is most developed in Brazil and Mexico, although as we’ve seen in other more developed regions,

lessons learned by one country quickly spill over to neighboring locations.

Brazil

Mexico

Argentina

Colombia

Chile

Peru

Ecuador

8% 8%6% 5%

2% 2%1%

1%

1%1%

53% 69%

29%

13%

201620132012 20172014 20182015

Colombia EcuadorPeruArgentina

Brazil Mexico Argentina Colombia Ecuador

Brazil

• Brazil is already the dominant programmatic market in Latin America, but it will only become more so as time

passes. Strong growth in the Brazilian digital market will see it claim over 60% of the region’s display spend, up

from today’s ~50%. Its share of the total programmatic spend will see comparable growth.

• Despite Mexico’s strong 33% CAGR for RTB growth through 2018, it will lose share of total RTB spend in the region

given the stronger growth of its neighbors, especially those with high inflation and therefore rapidly increasing

nominal spend totals. Through 2018 as undeveloped markets can quickly catch up once regional technology

players are in place.

2014

20122018

20122018

20122018

20122018

20122018

20122018

20122018

20122018

20122018

20122018

20122018

20132018

20122018

20122018

* Latin American markets in this study include: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru.

• Programmatic spend in developing Asia *

(both RTB and non-RTB programmatic) will be $ 501mm in 2014, up from $ 290mm last year (73% growth).

• RTB spend in developing Asia will be $ 54 mm in 2014, up from $ 19 mm last year (176% growth).

– Social represents the majority of non-RTB programmatic spend in our researched Asian markets.

• The combined size of the Japanese, Chinese and Australian programmatic markets are 6x larger than the rest of those in developing APAC.

– China’s display market will be $15 billion by 2017, 5x the size of all the developing APAC display markets combined.

• Korea represents the largest share of the total programmatic spend in the region, with $ 237mm of total programmatic spend in 2014. When looking at just RTB, however, Malaysia and Singapore will be the # 1 and #2 markets this year with $ 12mm and $ 10mm of spend respectively.

– By 2018, Korea will become the largest RTB market even though its RTB penetration will be one of the lowest in the region, the significant total size advantage it has on the other markets will eventually win out.

• Desktop display represents 94% of total RTB spend, with the remaining 6% representing

video and mobile RTB.

– By 2018, we expect desktop to only represent ~2/3 of total RTB spend in the region, and while mobile is currently the smallest total share, we believe that it will make up more of that remaining 1/3 than video based on a higher CAGR between now and then.

• Programmatic including both RTB and non-RTB purchases will represent 25% of total display spend in developing APAC in 2014.

– RTB will represent 3% of total display spend in 2014, although this will grow quickly with the most developed markets (Malaysia & Singapore) passing 30% RTB shares by 2018.

• Programmatic CPMs are typically <50c although they can range much higher for video and even mobile has a slight premium vs. desktop display. This compares to non-programmatic average display CPMs of $9.40, although non-programmatic purchases are typically more premium inventory.

* Developing Asian markets in this study include: Hong Kong,

Indonesia, Korea, Malaysia, Singapore, Taiwan, Thailand,

Philippines and Vietnam.

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PROGRAMMATIC IN DEVELOPING ASIA

KEY FINDINGS

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AppnexusGoogle

RubiconOpenX

Pubmatic

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TurnBrandscreen

DBM TubeMogul

Smatoo

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• The dominant ecosystem players in these developing Asian markets are the big international players seen in more developed regions.

• Because no individual market is substantial individually, few national players have developed to compete with the standard DSP/Exchange/Trading desk options.

• Growth rates are high enough in some of the smaller countries to justify global programmatic companies in establishing a presence despite the market being 1-2 years away from financial viability.

XaxisAccuen

CadreonVivakiOthers

• While in many of the largest APAC markets the ecosystem has developed from local companies (with big Western players moving in after the market was established), in the smaller and newer markets the ecosystem was built by global programmatic companies from the outset.

– In many developing APAC markets, Google remains the dominant exchange player by impressions.

• CPMs remain low as is typical for markets in their infancy. For desktop display, most CPM levels in APAC are in the 20-40c range depending on the inventory.

– Video is much higher with CPMs closer to $10 on average.

– Mobile is typically at a premium to desktop banners, but still in the 50c-$1 range on average. – The improvements in CPA and CPC for retargeting are seen despite the fact that retargeted CPMs are increasing over nonretargeted impressions. – It isn’t until several years after programmatic spend takes off that branding campaigns typically start taking a noticeable share of total programmatic spend.


* Developing Asian markets in this study include: Hong Kong, Indonesia, Korea, Malaysia, Singapore, Taiwan, Thailand, Philippines and Vietnam.

ECOSYSTEM IN DEVELOPING ASIA

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SingaporeIndonesia Philipines VietnamKorea Malaysia Hong Kong Taiwan Thailand

PhilipinesTaiwanMalaysia VietnamKorea Hong Kong Indonesia Singapore Thailand

SHARE BY COUNTRY

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3o

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Developing Asia Programmtaic Market Share (%)

Developing Asia RTB Market Share (%)

2016

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2013

2017

2017

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2014

2018

2018

2015

2015

• Total programmatic shares in the region will range from Vietnam’s mid-teens penetration and

Singapore’s 70% + penetration in 2018. The differences in social spend make up the majority of this

difference.

• RTB shares will vary significantly between low penetration markets like Korea & Taiwan barely in

double digits, and Malaysia and Singapore which will top 30% RTB market share by 2018.

PROGRAMMATIC SHARES IN DEVELOPING ASIA

SPEND BY COUNTRY

2011 20112012 20122013 20132014 20142015 20152016 20162017 20172018 2018

0.8

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1.6

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0.2100

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Developing Asia Programmatic Spend ($bn) Developing Asia RTB Spend ($mm)

• The markets that dominate RTB spend in the region in 2014 are a mix between high penetration markets that are

small overall (such as Singapore) and low penetration markets with large display spend overall (such as Korea).

• Over time, the larger digital markets will assert regional share dominance (as seen by Korea’s market share growth

through 2018) as undeveloped markets can quickly catch up once regional technology players are in place.

• The total programmatic spend in developing Asia will be $ 501 million in 2014.

Korea and Taiwan comprise the lion’s share of that spend.

• Total RTB spend will be $54 million in 2014, with a more even split in spend between countries.

• Social comprises the majority of the non - RTB programmatic spend in the region.

22%

20%14% 12%11%

12%18%

8%6%

8%

5%

10%

2%3% 2%

2%

15%31%

20182014

20132018

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* Developing Asian markets in this study include: Hong Kong, Indonesia, Korea, Malaysia, Singapore, Taiwan, Thailand, Philippines and Vietnam.

• Programmatic spend across the eight* markets researched in this report (both RTB and non-RTB programmatic) will be $488mm in 2014, up from $324mm last year (51% growth).

• RTB spend in our researched European markets will be $210 mm in 2014, up from $132mm last year (59% growth).

– This growth is skewed lower by some of the more developed markets i.e. Sweden and Denmark. CEE (Central and Eastern Europe) RTB growth will be 365% overall this year.

• Desktop display represents 85% of total RTB spend, with the remaining spend split between video at 6% and mobile at 9% of the total. By 2018, we expect desktop display to represent 68% of total RTB spend, with mobile taking a larger share of the remainder than it does currently.

• Programmatic including both RTB and non-RTB purchases will represent 30% of total display spend in our growing European markets in 2014. This will expand to 52% by 2018.

– RTB will represent 13% of total display spend in 2014, and this will expand to 26% of total display spend by 2018.

• CPMs are higher on average in the region than they are in many of the other developing regions at $1.00-1.20 in 2013. This varies substantially by country though, with Denmark and Sweden at the higher end, and some of the entirely remnant markets such as Serbia or even Portugal at the lower end at <25c CPMs. This compares to non-programmatic CPM averages of $9.90 in Western Europe, and $7.10 in CEE although these aren’t apples to apples comparisons across inventory.

– We see the same trend in Nordics and CEE that we see globally i.e. increasing CPMs as markets develop. The injection of more premium inventory outweighs the deflationary forces of programmatic trading.

* European markets in this study include: Denmark, Czech Republic,

Hungary, Poland, Portugal, Romania, Serbia and Sweden.

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• While there are some big ecosystem players that dominate European emerging markets more than they do in the existing developed markets, the same big players are present.

• Google has come closer to unifying platforms here than in many other regions, with strong presence in both the exchange and DSP categories.

XaxisCadreon

ResolutionAegisVivaki

PUBLISHERS

• While programmatic activity has been occurring in markets like Sweden, Denmark and Portugal for several years, in the CEE (Central and Eastern Europe) countries it is very new. Most of the big agency trading desks are just dipping their toes into the market in a regional hub and spoke model.

• While lack of information and education around programmatic pervades these markets, publishers and advertisers are eager to get involved.

– While waiting for the RTB ecosystem companies to establish operations, Google Display Network and non-exchange Facebook has made up most of the activity of programmatic operations in the region.

– 1st party databases are critical to the operation of programmatic campaigns since in many of the CEE countries there is a dearth of 3rd party data available. – Given the $1-2 or higher CPMs that valuable 3rd party data sees elsewhere and the rapid growth of RTB regionally, it would not be surprising to see local DMP solutions crop up if global competitors are slow to act. – The expansion of mobile and video RTB will be sooner on the heels of the expansion of the display market in these regions than it was in previously developed markets because tech solutions have already been developed.

* European markets in this study include: Denmark, Czech Republic, Hungary, Poland, Portugal, Romania, Serbia and Sweden.

ECOSYSTEM IN NORDICS AND CEE

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tin

Am

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a D

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sia

Nor

dics

and

CEE

5

10

15

20

25

30

35

0

SHARE BY COUNTRY

Portugal

Portugal

Hungary

Hungary

50

60

70

80

40

30

20

10

0

Nordics and CEE Programmatic Market Share (%)

Nordics and CEE RTB Market Share (%)

201620132012

20122018

20122018

20122018

20122018

20122018

20132018

20122018

20132018

20122018

20122018

20122018

20132018

20122018

20142018

20122018

20142018

20172014 20182015

• On a total programmatic basis (RTB and non-RTB combined), many of the countries will grow to over 50% of the total display market by 2018, with far more parity between the countries.

• On an RTB basis, the Scandinavian countries will see penetration rates similar to some of the Western European and more developed APAC countries. The CEE markets, on the other hand, are growing from essentially nothing in 2013 and therefore will only reach mid-teens or 20% penetration of total display in most cases.

PROGRAMMATIC SHARES IN NORDICS AND CEE

SPEND BY COUNTRY

2012 20122013 20132014 20142015 20152016 20162017 20172018 2018

800 400

1,000 500

1,200 600

1,400 700

600 300

400 200

200 100

0 0

Nordics and CEE Programmatic Spend ($mm) Nordics and CEE RTB Spend ($mm)

• The Scandinavian markets dominate among our researched European markets, as they have been active for several

years whereas the CEE countries have been active in RTB for less than a year.

• The Swedish market is both the largest display market in the group and will also have the highest RTB penetration by 2018.

• The Nordic markets have been active programmatically for several years, showing relatively advanced programmatic penetration rates in 2014 (ahead of many Western European markets). They are small relative to their level of advancement, however, with Sweden and Denmark combining to represent less than 25% of the spend seen in the UK.

• Non-RTB programmatic in many of the CEE markets such as Hungary has been Facebook PPC, GDN, eTarget,

CT Network, etc. Growth going into 2014 of non-RTB programmatic is due to the rapid expansion of social media especially on mobile devices.

• Because RTB is even newer than the non-RTB programmatic in most of these markets, it will grow to represent a larger share of total programmatic over the next several years. By 2018 RTB will comprise ~50% of the total programmatic spend.

Sweden

Denmark

Poland

Czech Republic

Portugal

Hungary

Romania

7%

13%

4%

7%

2%4%

3%

6%

1%0%

2%

1%

50% 44%

32%

24%

201620132012 20172014 20182015

Sweden

Sweden

Denmark

Denmark

Poland

Poland

Czech Republic

Czech Republic

Romania

Romania

Serbia

Serbia

Serbia

20182014

* European markets in this study include: Denmark, Czech Republic, Hungary, Poland, Portugal, Romania, Serbia and Sweden.

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APACEMEA

LATAM

AD MARKET BY REGION

2% MEA4% CEE

21% WE

3% Canada

33% USA

12% emerging

17% mature

30%

7%

28%

GLOBAL MEDIA MIX

Free TV

Pay TV

Search

Display

Mobile

Video

Other Digital

Newspaper

Magazine

Radio

Out-of-home

31%

10%

9%6%2%1%

3%

17%

7%

7%

7%

REVENUE GROWTH BY REGIONIn Percent

20142013

-0.8WE

2.1

CEE

7.99.5

NorthAmerica

1.5

5.5

APAC

6.3

8.7

EmergingAsia

11.3

14.6

LATAM

12.3

1.8

-5.0 -5.6

7.5

15.9

1.53.0

15.5

2.24.8 3.2

6.5

9.5

MEA

7.6

-0.3

DevelopedMarkets

0.9

4.2

REVENUES BY MEDIA

Emerging Markets

10.0

12.9

15%

20%

10%

5%

0%

-5%

-10%

Television Internet Newspaper Magazine Radio Out of Home All Media

-2.9 -3.9

THE GLOBAL ADVERTISING MARKET2013-2014As the world economy gradually improves in 2014,

so will advertising spending. We now expect global

advertising revenues to grow by +6.5% (previously:

+6.1%) and reach $521.6bn, which will be the strongest

year-on-year growth since 2010 (+8.4%, following the

2009 recession). The non-recurring sports events of

2014 (Sochi Winter Olympics, Brazil Soccer World Cup)

and the US mid-term elections will contribute to the

global growth of television (+7.5%). That compares a

with a modest 1.8% growth in 2013 for TV globally.

REVENUES 1999-2018

-10%

$200

0%

$100

-5%

$600

$500

$400

10%

$300

5%

$0 -15%

99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

Advertising Revenues in constant billion USD (2012) YOY growth/decline

The combination of an improved economic

environment and stronger than usual cyclical drivers

is bound to unlock marketing and branding budgets in

2014. This will primarily benefit television and digital

media where new formats and opportunities are being

explored for activation and branding campaigns.

These insights are based on the bi-annual global

advertising forecast update published on December 9,

2013. The next update will be published in June 2014.

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Reading this map: the size of each country is pro-portional to advertising spending in billion USD; the color reflects the level of spend per capita, akin to the intensity of advertising pressure: green is very low (less than $50), red is very high ($400 and more). This map reveals that the US alone represents a third of global advertising market while some large countries by surface or population, like India or Russia, remain largely underdeveloped.

Advertising Spending in $ per capita (2013)

$0 $100 $200 $300 $400 $500 $600

1bn5bn

10bn

in USD

Billion Dollars

TO

TAL

M

AR

KET

SIZ

E

490

Sri Lanka$143

Pakistan$308

Croatia $251

China

$44,100

Bulgaria $252

UA

Serbia $173

New Zealand$1,406

Austria $3,036 Greece

$940 Turkey$3,327

Saudi Arabia$1,707

Bahrain $121Hong Kong$3,032

Kazakhstan$329

Kuwait$534

$936

LV $97

Lebanon$188

LT $144

PL$2,463

HU

CZ$1,303

Korea

$8,083

Philippines$1,438

Qatar $236

Slovak Republic $384

Romania $406$620

Russia

$10,876

India

$6,882Taiwan$1,939

Japan

$52,070

EE $110

Egypt$2,456

Oman$161

Thailand$4,341

Vietnam$711

UAE

Australia

$13,234

Malaysia$2,637

Singapore$2,012 Indonesia

$6,326

FI

ASIA PACIFIC

MIDDLE EAST

$3,450

$1,592

$1,258

THE GLOBAL ADVERTISING MARKET 2013

France

$13,376

NL$4,090

AR UY

Canada

$13,004

USA

$156,546Switzerland$3,863

DK

Belgium$2,463

Germany

$23,621

Mexico$3,739

United Kindom

$22,092

Italy

$8,122 Spain$5,434

South Africa$4,541

Kenya$536

Morocco$420

Brazil$17,804

CO$4,914

VE

IE

NOSE

NORTHAMERICA

LATINAMERICA

EUROPE

AFRICAPanama$514

EC PE

$431

$446

$729

$1,231

Chile $1,419

$5,788

$1,147

PT

$673

Costa Rica$694 Puerto

Rico$918

$2,105

$3,031

ABOUT MAGNA GLOBAL

MAGNA GLOBAL is the strategic global media unit of IPG Mediabrands,

comprised of two key divisions.

MAGNA GLOBAL Investment harnesses the aggregate power of all IPG

media investments to create power and leverage in the market, drive

savings and efficiencies, and ultimately make smarter, more effective

media investments on behalf of our clients. With a stated goal of

reaching 50% automated buying by 2016, the team in North America

invests across digital, programmatic, broadcast and all traditional

media platforms and is therefore considered the most comprehensive

buying and negotiating unit in the media industry.

MAGNA GLOBAL Intelligence has set the industry standard for more

than 50 years by predicting the future of media value. MAGNA GLOBAL

Intelligence produces more than 40 annual reports on audience trends,

media spend and market demand, and ad effectiveness. For more

information, please visit www.magnaglobal.com or follow us on Twitter

@MAGNAGLOBAL.

ABOUT IPG MEDIABRANDS

We were founded by Interpublic Group (NYSE: IPG) in 2007 to manage

all of its global media-related assets. Today that means we manage and

invest $37 billion in global media on the behalf of our clients, employ

over 8,500 diverse and daring marketing communication specialists

worldwide and operate our company businesses in more than 130

countries.

A proven entity in helping clients maximize business results through

integrated, intelligence-driven marketing strategies, IPG Mediabrands

is committed to driving automated buying, pay-for-performance and

digital innovation solutions through its network of media agencies

including UM, Initiative, BPN, Orion Holdings, and ID Media. Its roster

of specialty service agencies including MAGNA GLOBAL, Mediabrands

Audience Platform, Mediabrands Publishing, IPG Media Lab, Ensemble,

and Identity offer technologies and industry moving partnerships that

are recognized for delivering unprecedented bottom line results for

clients. For more information, please visit www.ipgmediabrands.com or

follow us on Twitter @IPGMediabrands.

CONTRIBUTORS

Shaffia Sanchez

[email protected]

President, MAGNA GLOBAL, World Markets

Vincent Letang

[email protected]

EVP, Director of Forecasting, MAGNA GLOBAL

Luke Stillman

[email protected]

Forecasting Manager, MAGNA GLOBAL

Luis Contreras

[email protected]

Director, Cadreon, LATAM

Ullas Sahadevan

[email protected]

Director, Cadreon, APAC

Attila Eros

[email protected]

Director, Cadreon, CEE

Fredrik Forsberg

[email protected]

Director, Cadreon, Sweden

Julie Memborg

[email protected]

Director, Cadreon, Denmark

David Costa

[email protected]

MAP Portugal

Design by

Bureau Oberhaeuser

[email protected]

the international state of programmatic

Marketing