2008 Actual + 2009 Estimated Canadian Online Advertising Revenue Survey Detailed Report
2008 Actual + 2009 Estimated Canadian Online Advertising Revenue Survey Detailed Report
2008 Actual + 2009 Estimated Canadian Online Advertising Revenue Survey Detailed Report
1
IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Table of Contents
A. Background 3
B. Executive Summary 4
C. Detailed Findings
D. Appendix
2
IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
A. Background
The results of IAB Canada’s Annual Canadian Online Publisher Advertising Revenue Survey are
considered the most accurate measurement of Canadian Online advertising revenues, as the data is
compiled directly from information supplied by Canadian Online Publishers who sell advertising on
Canadian Websites, and Ad Networks, who sell advertising on both Canadian and U.S. Websites they
represent.
It should be noted that Ernst & Young does not formally audit the information supplied by participants in
their Survey responses, and provides no opinion or other form of assurance with respect to the
information. Results of individual respondent submissions are held in strict confidence by Ernst & Young
and are released in aggregate form only, to maintain individual Online Publisher/Ad Network
confidentiality.
The technical summary at the end of this Report contains basic Survey Methodology and the Definitions
of the various Online advertising vehicles (ad formats) reported on.
Martin Lundie
Ernst & Young LLP
3
IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
B. Executive Summary
Revenue Trends
Online advertising revenues in Canada have more than quadrupled over the past five years, and grew to
$1.6 billion (net) in 2008, up 29% from the $1.241 million reported in 2007.
Online’s $1.6 billion in advertising revenue for 2008 has now surpassed that for Radio ($1.55 billion); is
64% of Daily Newspaper ad revenue and over 47% of Television ad revenues.
French language advertising revenues grew by 22% in 2008 to $317 million (net), and accounted for 20%
of total Online ad revenues in Canada during 2008.
Respondents to IAB Canada’s 2008 Survey have forecast that Online advertising revenue in Canada will
grow to $1.75 billion in 2009 – an estimated 9.2% increase over 2008 actuals. This forecast includes a
7.8% increase to $342 million for French Publishers’ Online advertising revenue.
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
French language advertising revenues grew by 22% in 2008, accounting for 20% of total Online ad
revenues in Canada in 2008.
*NOTE: Online Advertising Revenues for French Canada were not able to be determined accurately until 2004.
5
IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
NOTE: IAB Canada’s Annual Online Advertising Revenue Survey has a 100% response rate for the Top
10 Earners, and a 95% response rate for the Top 20 Earners.
Revenue And Rate Of Revenue Growth By Online Vehicle (Ad Format) In 2008
Both Search and Display slowed their annual growth rate in 2008 to 26% and 13% respectively. Search
had previously grown by 39% between 2006 and 2007; while Display grew 38% in that same time.
Classifieds/Directories revenues continued their increase -- growing 57% between 2007 and 2008 -- BUT,
it should be noted that it’s estimated that half of the 57% growth in Classifieds/Directories revenues in the
2008 numbers was a result of revised classification of revenue by two leading respondents, who re-
classified revenue which had previously been in Display and Search into the Classifieds/Directories
format. This must therefore be taken into account, when understanding the rate of growth in the
Classifieds/Directories ad format in 2008.
Video, while still a small percent of the total Online Publisher advertising revenues in Canada,
nevertheless grew by 33% over 2007 numbers.
Although Email advertising revenues continue to represent only a small fraction of the total Online
advertising revenue within the annual IAB Canada Survey, it should be noted that these sums represent
only the revenue that is associated with ads placed within participating Publisher Email advertising
newsletters and individual email sends. As such, it does NOT capture the full sum of dollars spent on
Email marketing by Advertisers within the Canadian marketing industry, and therefore, Email’s low share
within IAB Canada’s Survey should NOT be assumed to be indicative of any declining importance of
Email within the overall Online advertising “toolbox”.
Similarly, although the growth in Display appears to be slowing at a substantial rate, it should be noted
that Video advertising was pulled out of the Display total starting in 2007. In addition, Display advertising
is actually occurring on various Search engines (as part contextual targeting programs/revenues within
Paid Search) and within the real estate on various Classifieds/Directories providers. However, in order to
be able to compare IAB Canada revenue numbers with IAB US numbers, IAB Canada has chosen to
keep Canadian Online Ad Definitions in line with those in the US.
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Revenue Growth By Online Advertising Vehicle Over Past Five Years: 2004-2008
During the five-year period of 2004-2008, the steep growth of paid Search and Classifieds advertising
revenues is evident.
Search 109 197 80% 343 74% 478 39% 602 26%
Display 189 230 22% 314 37% 432 38% 490 13%
Classifieds/
Directories 55 124 127% 223 80% 305 37% 480 57%
Email 11 11 1% 20 82% 17 ‐15% 18 6%
Video na na -- na -- 9 -- 12 33%
Total 364 562 54% 900 60% 1241 38% 1602 29%
The changes in actual dollars earned by Publishers for Search, Display and the other Online vehicles (ad
formats) over time, are shown graphically in the following column chart:
Five‐year Trend 2004‐2008: Online Ad Revenue Growth By Vehicle
$ net revenue (000) 602
$600
Search Display Classified/ Directory Email Video
478 490
480
$480
432
$360 343
314 305
230 223
$240
189 197
124
$120 109
55
11 11 20 17 9 18 12
$0
Year: 2004 2005 2006 2007 2008
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
The change in actual dollar allocation by vehicle (ad format) can be re-presented effectively as a line
graph as well, as shown below:
Display
478 490
$480 Classified/
480
Directory
432 Email
343
$360
Video
305
314
230
$240
223
189 197
109 124
$120
55
11 20 17 18
11
$0 12
9
Year: 2004 2005 2006 2007 2008
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Expressed as a line graph, the change in Share of Total Online Ad Revenue by Advertising Vehicle (Ad
Format) over the past 5 years is even more visible:
3% 2% 2% 1% 1% Video
0% < 1% < 1%
2004 2005 2006 2007 2008
Distribution of Total Canadian Online Ad Revenue by Major Product/Service Category: 2008 vs 2007
Media/
Total Auto- Entertain- Packaged Tech- Telecom-
Online motive Financial Leisure ment Goods Retail nology munications Other
2008 % ad revenue 100% 13% 11% 6% 6% 8% 5% 10% 9% 32%
2007 % ad revenue 100% 16% 11% 7% 8% 6% 9% 10% 7% 26%
Difference (points) -3 pts -- -1 pts -2 pts +2 pts -4 pts -- +2pts +6 pts
Leisure = travel, hotel, hospitality
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
The Percent Distribution of Total Canadian Online Ad Revenue by Major Product/Service Category for
2008 is also graphically expressed in the following pie chart:
Online’s $1.6 billion in advertising revenue in 2008 surpassed that of Radio at $1.55 billion, which means
that the Internet has moved up from fourth to third place, in terms of net total annual Canadian advertising
revenue.
Advertising Revenue by Major Medium in Canada: 2007‐08 Comparison
2007 2008 %
Rank $ Millions $ Millions change
1 Television $3,299 $3,391 2.8%
2 Daily Newspaper $2,572 $2,503 ‐2.7%
3 Internet $1,241 $1,602 29.1%
4 Radio $1,467 $1,547 5.5%
5 Magazines $718 $692 ‐3.6%
6 Out-of-home $422 $463 9.7%
Other Media $4,360 $4,422 1.4%
Total - all media $14,079 $14,620 3.8%
Source: TVB
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Canadian Internet advertising revenue now represents a full 11% (up from 8.8% in 2007) of the estimated
$14.6 billion total 2008 media revenue in Canada for all media combined per the table below:
Internet advertising revenues were also trended back 10 years in comparison to the three other top major
media of Television, Daily Newspapers and Radio. In just a decade, Online net advertising revenues have
grown from a tiny fraction to 64% of Daily Newspaper’s, 47% of Television’s ad revenues, and 104% of
Radio, as seen in the table below:
Net Ad Revenue Growth Trend 1999-2008 : Internet versus Canada's 3 other top media - TV, Dailies & Radio Index
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 of Size
Internet $ Millions $56 $110 $97 $176 $237 $364 $562 $900 $1,241 $1,602 100
% change 96% -12% 81% 35% 54% 54% 60% 38% 29%
Television $ Millions $2,370 $2,450 $2,553 $2,593 $2,827 $2,964 $3,014 $3,241 $3,299 $3,391 47
% change 3% 4% 2% 9% 5% 2% 8% 2% 3%
Daily Nwspr $ Millions $2,428 $2,581 $2,501 $2,510 $2,529 $2,611 $2,659 $2,635 $2,572 $2,503 64
% change 6% -3% 0% 1% 3% 2% -1% -2% -3%
Radio $ Millions $953 $1,001 $1,048 $1,080 $1,171 $1,209 $1,313 $1,388 $1,467 $1,547 104
Source: TVB
The Internet’s steep revenue growth curve becomes dramatically evident in the following line graph:
$800 $953
$56
$0
Year: 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Online As A Percentage
Of All Media Spend By Country - 2008
Denmark 24.4%
UK 23.1%
Norway 21.1%
Sweden 19.5%
Netherlands 18.0%
France 16.1%
Germany 15.2%
United States 12.5%
Finland 11.5%
Canada 11.0%
10.5% Sources: IAB Canada / Ernst &Young,
Belgium
IAB Europe / PWC, IAB US / PWC, WARC.
Spain 8.9%
Italy 8.7%
Austria 6.8%
Greece 2.1%
In summary, Online Publishers cite their main challenges/opportunities going forward into 2009 as coping
with the severity of the economic downturn; demonstrating Display advertising’s return-on-investment
(with or without a click) in response to growing Advertiser emphasis on performance-based (CPC/CPA)
pricing models; training offline media sales forces to effectively integrate Online into cross-media sales
proposals; and the commoditization of Online media by the growing number and increased market share
of Advertising Networks.
PAST NEXT
Perceived Challenges / Opportunities 12 12
Months Months
1. Negative impact on budgets and CPMs due to the recession
2. Demonstrating ROI of Display Advertising, Branded Entertainment and
Membership Databases
3. Growing emphasis by Advertisers on performance-based CPC /CPA
pricing models
4. Training offline sales forces to effectively market Interactive products
and opportunities on an integrated basis
5. Commoditization of Online medium due to growth of Ad Networks
6. Building Agency/Advertiser appreciation of Online’s importance to cross-
media marketing campaigns
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Survey Scope
The Canadian Online Advertising Revenue Report is a part of the IAB Canada’s ongoing mission to
provide an accurate barometer of Interactive, and specifically, Online advertising growth in Canada.
The Interactive Advertising Bureau of Canada (IAB), has retained Ernst and Young to jointly establish,
maintain and continuously update comprehensive Survey standards for measuring the growth of Online
advertising revenues in Canada.
To achieve and sustain industry-wide acceptance, key aspects of IAB Canada’s annual Canadian Online
Advertising Revenue Survey include:
- Making the Survey as inclusive as possible, encompassing direct data results from Publishers of
all sizes, for all forms of Online advertising;
- Ensuring and maintaining a confidential process, both in terms of methodology, and in terms of
releasing only aggregate data; and,
- Analyzing historical Survey data from within the Survey, to identify broader trends over time.
Survey Methodology
Ernst and Young and IAB Canada work jointly to:
- Compile a database of potential Canadian Online Publishers and Online Ad Networks to survey
annually, in relation to Online advertising revenues -- in both the Total, and French Canadian
markets;
- Conduct an annual quantitative mailing Survey with the above industry players;
- Acquire supplemental data through the use of publicly-disclosed information.
o These include total annual Gross commissionable advertising revenue, and total annual
Net advertising revenue. Net revenue is calculated by subtracting the following from the
Gross figure: (a) Agency commissions, (b) Publisher revenues derived from Ad Networks
and (c) Ad Network revenues derived from other Ad Networks.
o Annual Net revenues are requested to be broken down by advertising vehicle (Display,
Search, Email, etc.), along with a percentage breakdown for each vehicle based on
English and French Canada.
o Percentage breakdown of annual Net revenues is also requested across nine different
advertiser product/service categories that sum back to 100% of the Net revenue:
examples include Automotive, Financial, Technology etc.
- Identify incomplete responses from actual respondent returns and apply a conservative revenue
estimate for missing answers.
- Report the aggregate findings of the Survey, and report key trends within the Survey responses.
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Confidentiality Procedure
All the information submitted by respondents within IAB Canada’s annual Canadian Online Advertising
Revenue Survey is completely confidential, due to the “double-blind” data collection methodology that is
rigorously employed by IAB Canada and Ernst + Young.
Double-blind Methodology
1. Online Publishers and Ad Networks to be surveyed are derived from IAB Canada Member lists, and
from comScore Media Metrix’s AdFocus list (a list of Web properties selling Online advertising in
Canada).
2. Each Online Publisher or Ad Network selected for surveying is assigned a unique alpha-numeric code
that only the IAB President is aware of, and sent an IAB Canada Revenue Survey with only this
unique alpha-numeric code on it.
3. Once completed, respondents return their anonymously-coded survey in the postage-paid envelope
provided, addressed to Ernst + Young.
4. Martin Lundie, CA Partner Technology, Communications and Entertainment Assurance and Advisory
Business Services, Ernst + Young, receives the Surveys, and gives weekly reports back to the IAB
President, about which alpha-numeric codes have and have not been received to date.
5. Once all the Surveys are in, responses are recorded, averaged and extrapolated by segment to the
total Canadian Publishing market.
6. Aggregated Canadian market totals are sent to the IAB President for verification, and then presented
to the IAB Canada Board for final approval. The IAB Board confirms that the Survey methodology is
sound and the tabulations are correct, and votes to approve the publication of the Revenue Survey
numbers.The IAB Canada Revenue Survey Comte. is asked to validate the Board’s decision before
final publication of the numbers.
7. A Report detailing final Survey actuals and estimated next year’s Canadian Online advertising
revenues (for both English and French markets), is created. The Report also includes estimates of
percent revenues by Advertising Vehicle (i.e. Display, Search, etc.), and by Advertiser Category
(Finance, Packaged Goods, etc.).
Display Advertising – Advertiser pays an Online Publisher for space to display a static or rich media
hyper-linked banner, big-box, skyscraper, over-the-page unit, button, etc., on one or more of the
Publisher’s Webpages.
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
inquiries (e.g., auto dealers who pay a fee in exchange for receiving a qualified purchase inquiry Online)
or provide consumer information (demographic, contact, behavioral), where the consumer opts into being
contacted by a marketer (email, postal, telephone, fax). These processes are priced on a performance
basis (e.g., cost-per-action (CPA), cost-per-click (CPC), cost-per-lead or cost-per-inquiry), and can
include user applications for service (e.g. applying for credit card, mortgage or insurance), surveys or
registrations.
In-Stream Video Advertising (CPM only) – Pre-, Mid-, Post-Roll, Overlay format, etc. NOTE:
Companion ad revenue is NOT to be included in this figure, unless the Video package is sold in such a
way that one cannot separate the revenue (i.e. companion ad revenue should NOT be recorded in both
Video and Display).
E-mail – Banner ads, links or Advertiser sponsorships that appear in Online Publisher’s E-mail
newsletters, E-mail marketing campaigns and other commercial E-mail communications. Includes all
types of electronic mail (e.g. basic text or HTML-enabled).
Search – Fees Advertisers pay Online Publishers to list and/or link their company site/domain name to a
specific Search word or phrase via paid listings, paid contextual search or paid inclusion programmes.
• Contextual search – Text links appear in an article based on the context of the content, instead
of a user-submitted keyword. Payment only occurs when the link is clicked.
• Paid inclusion – Guarantees that a marketer’s URL is indexed by a search engine. The listing is
determined by the Search engine's algorithms.
Classifieds and Auctions – Revenue Online Publishers get to list specific Advertiser products or
services (e.g. in Online job boards and employment listings, real estate listings, automotive listings,
personals listings, auction-based listings and merchandise).
Directories – Revenues Online Publishers get to list specific Advertiser products or services on city sites,
yellow pages, white pages, etc.
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com
Who We Are
The Interactive Advertising Bureau of Canada is a not-for-profit association representing a membership
composed of Interactive Advertisers, Agencies, Publishers and Service associates.
Our Vision
To be the national voice and de facto thought leader for the Interactive marketing industry.
Mission Statement
Working with Advertisers, Agencies, Publishers, and Service Associates, IAB Canada will establish and
communicate Interactive advertising best practices that optimize Advertiser investment, leading to
increased stakeholder value.
We do this by:
• Being the pre-eminent source of Canadian cross-media (CMOST) and other Interactive
advertising research;
• Setting standards and guidelines that make Interactive media easier for Advertisers and Agencies
to plan, buy, design, execute, track and evaluate;
• Promoting research, standards and the overall effectiveness of Interactive advertising to
Advertisers, Agencies, Publishers and the press, via various types of educational courses,
events, and through the IAB Website;
• Assisting the industry in attracting, training and motivating human resources;
• Being an advocate for the Canadian Interactive advertising industry to the Canadian government;
and,
• Expanding the breadth and depth of IAB membership, to increase communication and networking
between industry stakeholders, and to provide direct value to members.
Have A Question About IAB Canada’s Annual Online Advertising Revenue Survey?
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IAB Canada: 2 Carlton Street, Suite 820, Toronto, Ontario M5B 1J3
Phone: 416.598.3400 Fax: 416.598.3500 www.iabcanada.com