Google and TikTok’s popularity grows as UK advertisers move away from Meta in the interest of diversification

Among British online retailers, Meta remains atop the virtual table as the most popular advertising platform, commanding over half (52%) of total advertising spend in Q2 2023.

The dominance should not be mistaken with growth however, as the average ad spend on the platform has fallen by 11% year-on-year with Google, TikTok and Miscosoft each gaining ground.

This data comes from Juni, a financial platform built for digital commerce, whose latest report points to increasing diversification among UK ecommerce businesses as the primary reason for this shift in ad-spend.

Slowly but surely, diversification is on the rise

In Q2 2022, Meta and Google made up 87.3% of total ad spend in the UK. In Q2 2023, this has fallen to 83.7%, with more of the share being invested into mobile-first platforms like Snapchat and TikTok.

Although the difference may seem modest, the change indicates a growing trend that diversification’s popularity is on the rise - marketers should consider acting on this sooner rather than later or risk falling behind other advertisers further down the line.

Google vs Meta

Across Europe, Google leads the ad-spend market, enjoying 52% of ad-spend versus Meta with 39%. It appears that the UK is beginning to align itself more with European counterparts, with investment in Google ad share rising from 24.3% in Q2 2022 to 31.7% in Q2 2023.

It is worth noting however, that Google did see a slight decrease in total ad spend share from Q1 of this year - Juni’s report portends that this may be due to the skippable ads argument between advertisers and YouTube heating up.

Microsoft's ad spend has gone from 0.3% to 1.5% compared to this time last year, likely because of the buzz surrounding OpenAI’s Chat GPT powering Bing. However, just like Google, Microsoft's share has declined compared to last quarter, falling 0.6%.

TikTok’s share grows 50%

Mobile platforms have enjoyed consistent growth in the ad share market over the past 12 months, none more so than TikTok. The video-sharing platform, amongst UK online retailers, has seen its ad-spend market share increase by almost 50% from Q2 last year to the same time this year, growing from 3.78% to 5.67%.

TikTok hasn’t enjoyed such growth across the rest of Europe however, with the bulk of the continent far more hesitant to invest in the Chinese-owned app. TikTok represents just 0.78% of European ecommerce retailer adspend (excluding the UK), a slight increase from its figure of 0.68% in Q1 2023.

Somewhat surprisingly, the ad share invested in mobile-app Snapchat has remained largely flat year-on-year (0.55% in Q2 2022 vs. 0.52% in Q2 2023). The surprise comes in the form of a largely unpredicted recovery from a sharp drop to 0.17% in Q4 2022. With recent reports indicating brands are no longer running ads on the popular social media platform, citing lack of efficiency, reasons for the rebound are relatively opaque.

Samir El-Sabini, CEO and co-founder of Juni, said of the findings: “Our data shows that UK ecommerce businesses are both diversifying and reducing their advertising spend. The battle of the ad platforms continues as online retailers are moving away from Meta and towards Google, with gains being made by TikTok, Microsoft, and Snapchat as businesses gear up for the peak shopping season in Q4.

“With Black Friday and Christmas approaching, ecommerce businesses are likely reducing overall ad spend to invest in inventory to hedge against inflation.”

Advertising still dominates ecommerce expenditure but its popularity is plummeting

In the UK, advertising is still the popular choice for ecommerce businesses, amassing a 41% share of the total spend. Somewhat alarmingly, despite it remaining dominant proportionally, this figure represents a 28.8% year-on-year decrease from 69% in Q2 2022.

The money being removed from ad spend is being invested into inventory, which accounted for 21% of online retailers’ overall budget this quarter - a dramatic rise from 6.3% 12 months ago. The report argues that the increased investment in inventory is a product of fighting against inflation, as businesses buy stock now before it gets more expensive and can prepare for peak shopping season in Q4.

El-Sabini however, believes this is no cause for alarm and that advertisers should refrain from panicking.

He concluded: “We believe this is atypical and driven by inflation rather than a consistent downward trend, with spending still higher than Q4 last year – which is typically the highest. British online retailers are simply being prudent and we expect ad spend to grow again in Q3.”