EU’s new Brexit deadlines to scupper UK Digital £13bn* Ad market review?

Among all the political mayhem and economic uncertainty that Brexit is bringing to our shores, the chancellor’s call in his recent spring statement for a formal CMA review of the UK’s digital Ad market bears all the hallmarks of another inadvertent, self-induced shot in the government’s foot.

With a nod to expediency, Philip Hammond has urged that the review is carried out as soon as possible. However, under increasing pressure from Brexit, the CMA (Competition and Markets Authority) insists that its ability to launch new projects will be heavily dependent on the outcome of EU exit negotiations.  Hammond concedes that a no-deal Brexit would make it impossible for this review in the near future.   All good news for Google and Facebook!

Request follows independent report findings that Google and Facebook ‘dominate’ the market

Between them, Google and Facebook account for two-thirds of the UK’s £13b digital Ad market, yet at no point are they obliged to declare the range of critical performance data that’s readily available to advertisers and agencies buying non-digital media.  By 2020, it is expected that the two companies will have a 72% share* of total digital Ad spend;  Facebook will be bringing in an estimated £3.8bn in UK advertising expenditure – £1bn more than in 2018 – and only slightly less than the value of the entire commercial TV market (£4.04bn).  Businesses and the buying sector and are crying out for transparency and  accountability from Google and Facebook, yet as the position stands, the market leaders can set the rules according to their world view.   

The chancellor’s move follows a review conducted for the Treasury by Jason Furman, Barack Obama’s chief economic adviser, who concluded that the dominance of the big digital players was curbing innovation and reducing consumer choice.  It recommended that a formal study should be launched into the UK digital Ad market which is “dominated by two players and suffers from a lack of transparency”.  The review would also involve UK media regulator, Ofcom.

TMS12 view

Google and Facebook’s market domination is nothing new; the truth is that the government’s call for a review is long overdue, which makes the timing of its announcement even more laughable.  Given the inexorable force of Brexit, Hammond’s move has surely come much too late:  the longer we wait for a formal review, the more entrenched in our market – and financially fortified from it – Google and Facebook will be. 

* eMarketer

Richard Huglin

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

Have a project in mind? We would like to hear from you

Contact us using the information below, or fill out our form.

Make an enquiry

  • This field is for validation purposes and should be left unchanged.