Facebook and Google Maintain Grip in UK Digital Ad Market

Despite broad economic uncertainty fueled by Brexit and reduced digital ad spending across multiple industries in the UK, Facebook and Google’s shares of the digital ad market in the region continues to grow.

The two companies will make up an overwhelming 68.5% of the UK digital ad market in 2019, revised upward from our earlier estimate of 63.3%. This is up from 65.8% last year, and by 2021, Facebook and Google’s share of the market will hit 70%. This year, Google will make $8.27 billion and Facebook will make $5.16 billion off the digital ad market in the UK.

We’ve seen auto, financial services and consumer packaged goods advertisers spend less in light of Brexit, but Facebook and Google have benefited from the uncertainty: Brands are turning toward tried-and-true ad platforms that they believe can deliver results, and the two tech companies have been safe havens in particular for small and medium-sized businesses in the UK. With their reach, advertisers that have tight budgets feel more confident spending on platforms they feel can provide good audience measurement statistics and assurance against ad fraud.

“Beyond just reach, Facebook and Google offer a rich vein of first-party consumer data,” said Bill Fisher, senior analyst at eMarketer. “In a post-GDPR world, this has become an important currency with which to trade. The EU regulation was supposed to level the digital playing field, but it looks like it’s actually strengthened the duopoly’s hand.”

In terms of monetization per user, Facebook leads all other social media platforms: This year, Facebook (excluding Instagram) will make £83.27 ($111.01) per user, compared with £49 ($65.33) Instagram, £15.85 ($21.13) Twitter and £8.22 ($10.96) Snapchat.

This lead will narrow somewhat in the next two years as Instagram increases its average revenue per user (ARPU). We estimate that in 2020, Instagram will make £67.14 ($89.51) per user, which will grow to £84.35 ($112.45) by 2021.

Our figures also show that Instagram and Snapchat are monetizing users at a faster rate than Facebook and Twitter, but the ARPU for the latter two companies continues to grow.

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