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Google and Facebook made up 67.8% of the UK digital ad market last year, which we expect will drop slightly to 65.9% this year.

How we've changed our forecast of duopoly share of UK ad spending

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This is mainly a result of the pandemic’s disruptions to Google’s ad business, but we anticipate Facebook to be more resilient as it continues to maintain growth. However, despite the slight dip this year, the duopoly’s share will rebound to 69.1% in 2021, nearly in line with our original predictions.

Below is a breakdown of our UK ad revenue forecast by company:

  • Google’s ad revenues will fall 5.5% this year overall due to a sharp fall in search revenues, though its display business will continue to grow. This is a significant decrease from 2019, when the company’s net revenues grew by 14.5% largely because of major pullbacks in travel and hospitality ad spending and a shift to non-commercial search activity during the pandemic, according to eMarketer forecasting analyst at Insider Intelligence Peter Vahle. Some parts of the company’s ad business will be hit harder than others: For example, Google’s share of the UK search advertising market has already been falling, and we expect the pandemic will only accelerate this trend, for a total decline of 7.4%. But the company’s display ad revenues will still grow 3.8% this year, as display is better suited for direct-response advertising that many marketers are turning to in the pandemic, and YouTube’s relative strength helps offset losses elsewhere.
  • While Facebook’s ad revenues will grow by 5.6% this year, the company will still lose some share in the display ad market. Though the company’s continued growth is optimistic, it still represents a major drop from our previous estimate of 19.2%. The company’s direct-response advertising options, in addition to its overall familiarity to advertisers and ease of use, help to make it more resilient to drops in the ad market. Still, this growth will not be enough for Facebook to gain share in the display ad market against faster-growing digital companies. Facebook already makes up a massive share of the market, 60% in 2019, and we expect a slight decrease to 59.1% this year. Instagram’s strong growth has helped the company keep some of this share, but declines to the core Facebook platform will weigh it down.

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