Tech Giants Double UK Ad Revenues in Four Years

Ad revenues for the digital aggregators have nearly doubled over the last four years while newsbrands have declined by more than a quarter over the same period, according to the latest Advertising Association/Warc ad expenditure report this week.

Full year figures for 2016 show that UK ad spend for internet pure play, mainly Google and Facebook, has nearly doubled since 2012 to reach more than £9 billion in 2016.

By contrast, news brands have declined by more than a quarter over the same period with digital revenues for local newspapers one of only two digital categories measured by the AA/Warc study not to have grown in 2016.

Newsbrands were forecast to grow digital spend in 2017, with national newspapers forecast to grow by more than 11 per cent, but digital ad spend for internet pure play dwarfs spend in news brands. In 2016, spend on internet pureplay was more than 20 times greater than digital ad spend in news brands, the data showed.

Despite this huge imbalance, news brands add significant value to the internet with nearly half of all engagements on UK content on social media are powered by commercial news brands, according to Newswhip data.

In an interview with Amol Rajan on BBC Radio 4’s  The Media Show last week, News Media Association chairman Ashley Highfield spoke of the imbalance between news media publishers’ investment in content and the commercial rewards coming to publishers.

He said: “By all accounts nine out of every 10 incremental pounds that are spent in the UK on advertising are going to just those two companies and yet something like a half of all the content being created on those platforms comes from news publishers.”

NMA vice chairman David Dinsmore and Newsquest chief executive Henry Faure Walker addressed the issue at Press Gazette’s Digital Journalism Summit last month.

Mr Dinsmore said: “Newsgatherers are spending nearly all the money digging up the news. News is the vital component that makes people really engage with social media. The social media platforms are then extracting nearly all the revenue from that news on their platforms.

“This is not a complaint, it’s statement of reality. The terrifying prospect of not sorting out this broken relationship is a world where edited, verified news simply ceases to exist unless it is funded by the state. In other words, we’ll be left with the BBC and a network of bloggers so small they are able to live unregulated and largely outside the rule of law.

Speaking about Google and Facebook, Mr Faure Walker said: “The economic problem is that they have been for a number of years now free riding professional journalism content the publishers produce, gleaning lots of great data insights on top of that free content, got lots of good tools for optimising for advertisers that content, and if we’re lucky we get a few crumbs off the table.”