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Google and Facebook will continue to dominate the UK digital ad landscape, and for the first time next year, their combined revenues are expected to account for over half (50.8%) of all spending on digital ad formats—nearly £8.06 billion ($12.59 billion)—according to eMarketer’s latest forecasts.
Google is a well-established player and has long enjoyed its position as the UK’s No. 1 digital publisher; however, the same cannot be said for Facebook, which has experienced a meteoric rise in recent years. Google’s share of UK digital ad spending is expected to reach 41.6% in 2015, up from 40.5% this year, and eMarketer estimates its market share will remain stable for the remainder of the forecast period.
Facebook, on the other hand, will see impressive growth. This year, its share of the UK digital ad market will reach 7.9%, up 5.9 % year over year, and eMarketer predicts that this number will surpass 10% by 2016. UK ad revenues at Facebook will reach £576.1 million ($900.2 million) in 2014, and the company will grow its UK ad business by 29.0% next year, eMarketer estimates, to £743.0 million ($1.16 billion).
The two companies’ hold on the UK digital display market is almost equally as strong as their hold on the total digital ad market, though shares of the display market are more evenly distributed between the two. This year, for the first time, Facebook will take a larger share of UK digital display spending than Google, with 25.0% and 23.0%, respectively, eMarketer estimates. This trend will continue over the next few years, with Facebook continuing to grab the lion’s share of UK digital display spend.
One major driver of growth for both companies—and the market overall—comes from mobile advertising. eMarketer estimates mobile advertising spending in the UK will reach £1.81 billion ($2.83 billion) this year, accounting for 24.9% of digital ad spending, compared with just 16.4% last year. By 2018, mobile is expected to claim a whopping 67.0% of digital ad investments and over one-third of all ad spending in the UK.
eMarketer has raised its forecast for Facebook’s and Google’s digital ad revenues in the UK for 2014 while lowering that of Twitter, based on each company’s Q3 2014 earnings statement. Overall, we estimate that Twitter will earn £89.5 million ($139.8 million) this year in the UK, of which over £81.7 million ($127.7 million) will come from ads—this represents a mere 1.1% of all digital ad spending in the UK. Advertising will continue to account for the majority of Twitter’s UK revenues through 2016, when eMarketer projects ads will bring in over £188.8 million ($295 million) for the social network.
eMarketer bases all of its forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.
In addition, every element of each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of each forecast means those assumptions and framework are constantly updated to reflect new market developments and other trends.
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