In 2015, total internet advertising revenue was $170bn globally. Advertisers worldwide are expected to spend more than €210 bn in 2020, growing at a 12.1% CAGR, showing how appealing the market opportunity is. This positive evolution is based on two main drivers, the increasing efficiency (conversion), segmentation of users in online advertising and costs compared to traditional channels like TV, radio or press and the permanent incorporation of new companies (mostly SMEs) to online advertising. European data confirms the same market behaviour. According to IAB Europe, European firms allocated more than €36.2bn in online advertising in 2015, with an average growth of 13.1% in All of Europe.
In fact, it is expected that online market will be the most relevant advertising mean by 2018, passing TV for the first time ever. This growth record is expected to continue due to three concurrent factors:
● The dramatic change on advertising spending from offline to online channels. In 2011 online advertising accounted 17.6% of total advertising spending. In 2015, it reached a 27%.
● The emergence of new online channels such as mobile marketing, video and social media which reinforce the value of online advertising. In fact, during 2016, mobile advertising will account for more than 40% of digital advertising market growth.
● The growth opportunity that lies in the different maturity level shown by European countries. For example, while a mature market as UK shows a growth ratio of 13.4%, a slower adopter as Ireland can reach a growth ratio of 35%. That implies a huge growth opportunity trough a sequenced entry in different European markets. In addition, marketing automation is the use of software and Webbased services to execute, manage and automate marketing tasks and processes. It replaces manual and repetitive marketing processes with purposebuilt software and applications geared towards performance. It is a hot market and hasbeen identified as one of the most promising categories within the so called “MarTech” arena. The opportunity posed by marketing automation is closely related with the client company size. The traditional marketing automation players as Kenshoo, Marin and Adobe Media Optimizer, are focused on relatively big companies, including in some cases, marketing agencies. They charge a percentage of the investment made by the client and are halfway between fully automatic and manual, meaning some tasks are still manually managed to comply with big clients requests. A high degree of expertise is also needed to be able to hire, use and understand these tools. The above mentioned create an opportunity space in the SMEs market, where the needed functionality is considerably simpler, price is a key issue and revolutionary business models are needed. According to our market research, this opportunity is confirmed by huge differences in adoption depending on firm size.
The primary problem owner in this category is JOT IM.