This is a guest post by Samantha Merlivat, a researcher serving Marketing Leadership professionals.
Forrester’s Western European Online Display Advertising Forecast projects that online display advertising spend will rise at a CAGR of 10.3% between 2014 and 2019, jumping from €7.3 billion to €11.9billion. Two factors will account for the double-digit growth rate:
- Mobile display will pick up quickly over the next five years, with tablet taking off full speed in virtually every European market. With their larger screen real estate and growing role in customers’ path to purchase, tablet-based ads will grow at a 40.5% CAGR over the period, attracting a third of total online display revenue by 2019.
- Video and rich media formats are also growing strong. Video in particular will increase 20% annually over the next five years. Attracted by the higher opportunities for story-telling and building engagement, marketers will be willing to invest higher CPMs in these formats.
These trends hold true throughout Western Europe, although distinctive patterns will emerge with regards to display spend across devices:
- Online display advertising revenue in the UK will grow at 9.1% annually — the slowest growth rate in Europe, reflecting the maturity of a market where growth opportunities are becoming more difficult to find. In addition, PC display revenue will face a serious slowdown starting in 2014. In fact, we expect it to decline through 2019. Ad spend will be redistributed towards tablet-based ads instead, which will make up nearly 50% of total online display in 2019.
- Germany will remain the second largest market for online display and will start slowly closing the gap with the UK, while France will remain a distant third. Overall, the German market will grow at 9.4% annually between 2014 and 2019, and the French market will grow at an annual rate of 11%. In both countries, PC display will still grow, but at a very slow pace, while tablet display will grow quickly and come to represent nearly a third of total online display by 2019.
- By 2019, the Netherlands will see the highest ratio of online to offline advertising revenue, with online display accounting for 21% of total display advertising. The Dutch market for PC-based display will stagnate, while tablet will boom. At €54.3, the online display advertising revenue per online user, the Dutch market will have the highest among these four countries.
In the US, online display ads will grow at 13.7% CAGR over the next five years, according to the North American Online Display Advertising Forecast also published today. For more information on the US forecast, see this blog post.