Market Watch

Internet Advertising Round-Up Q3

November 26, 2010

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Display Driver IC Forecast

First-half trends from several European markets, as well as Google results, confirmed that internet advertising is on tracks to full recovery in 2010.

Local surveys from national IABs, summarised by IAB Europe, show that internet adspend grew double-digit in most European markets in H1. Spain was up 20 per cent (search 14 per cent, display 28 per cent), Poland was up 18 per cent, Italy up 15 per cent, Hungary 11 per cent, Bulgaria 10 per cent, and Romania 8 per cent. Earlier in the quarter, IAB UK and IREP had revealed that the British and French markets both grew 10 per cent in the first half.

Although some of these results are only indicative estimates, they are in line with the recovery forecasts made by Screen Digest at the Interact Congress in June 2010. Since then, we have slightly increased our display forecast (from +7.9 to +9.7) and maintained our search forecast largely unchanged (from +15.1 to +14.9). Our total internet forecast for Europe now stands at 12 per cent, up one point from the June forecast (10.8 per cent).

Meanwhile, the US market grew by 17 per cent in the third quarter to $6.4bn, according to IAB US. On a full year basis, Screen Digest is expecting the US market to grow by 13.3 per cent (search +15.7). Google reported Q3 revenues up nearly 23 per cent year-on-year, in line with the first two quarters. US revenues grew 23 per cent, UK revenues grew 10 per cent in dollars but 19 per cent on an organic basis (excluding exchange rate and hedging effects), and revenues from the rest of the world grew 26 per cent (organic). Baidu reported online marketing revenues up 76 per cent in Q3 to $337m (RMB2,256m) and revenue growth for the first nine months reached 72 per cent at $809m. We believe the global search market, in which Google has a 83 per cent market share, is to grow 18 per cent this year to reach the $30bn mark.

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