Google Stays Firmly Atop UK Ad Market - eMarketer

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Google Stays Firmly Atop UK Ad Market

Facebook's UK revenues continue to grow significantly

July 3, 2014

This year, eMarketer expects Google to remain the UK’s No. 1 digital ad publisher by a wide margin. The search giant will take in roughly 40% of UK digital ad spending annually through at least 2016. We estimate that Google will increase net digital revenues in the UK by 16% this year, an upward revision based on higher-than-expected earnings reported in Q1 2014.

Google Net UK Ad Revenues, by Format, 2012-2016 (millions of £, % change and % of digital ad spending)

Growth in Google’s display ad business, which will net £556 million ($868.8 million) this year, according to our estimates, will dwarf that on the search side for the remainder of the forecast period. Still, search will make up the bulk of the company’s ad earnings. The company’s net search revenues will top £2.37 billion ($3.70 billion) in 2014, accounting for 61.7% of the UK search ad market and nearly one-third of the country’s digital ad market. Google’s share of search ad spending will shrink slightly through 2016 as the search ad market becomes increasingly diversified with smaller search publishers—many which will operate primarily on mobile devices.

Google’s net display revenues will account for a significant share of total UK display ad spending as well, at 23.1% of the total this year. But in the display market, Google has a close rival in Facebook, which will earn 22.1% of UK display ad revenues in 2014—just 1 percentage point less. eMarketer expects Google to grow its display revenues more quickly than Facebook in 2015, pulling further ahead. Twitter, meanwhile, will get just 3.7% of display ad outlays in the country this year.

UK Display Ad Revenues at Facebook, Google and Twitter, 2012-2016 (millions of £, % change and % of display ad spending)

Twitter’s earnings will be small compared with Google’s and Facebook’s but are set to grow dramatically in the coming years. Overall, eMarketer estimates that Twitter will earn £96.9 million ($151.4 million) this year in the UK, of which more than £90 million ($140.8 million) will come from ads—more than double last year’s ad earnings. Advertising will continue to account for the lion’s share of Twitter’s UK revenues through 2016, when eMarketer projects ads will bring in over £206 million ($322.7 million) for the social network.

Facebook’s UK revenues will continue to grow significantly, boosted in particular by increases in mobile ad outlays. We have also increased our forecasts for Facebook’s and Twitter’s UK ad revenues since our March 2014 estimates, based on higher-than-expected earnings in Q1 2014.

eMarketer’s projections for digital ad revenues for major ad publishers measure net digital ad revenues after traffic acquisition costs paid to partner sites.

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 of 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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