Google and Meta, the owner of Facebook, accounted for at least half of the £43 billion spent on advertising in the UK last year, according to new research.
The two companies took about £26 billion in revenue last year, despite concerns about the amount of tax paid in the UK by US digital giants.
Their dominance of the advertising market has been accelerated by the growth of search engines and social media platforms.
Google’s UK advertising business brought in about £20 billion, according to Press Gazette analysis of figures produced by the Advertising Association. Meta, which owns Facebook, Instagram and WhatsApp, made about £6 billion in revenue from its UK advertising business, the analysis said.
Social media advertising, which includes YouTube, owned by Google, was the fastest-growing segment of the British advertising market, growing by 22.7 per cent, the Advertising Association/WARC report found.
Search advertising spend, which includes money paid by businesses to sit higher in Google’s rankings, also grew quickly in 2024, up 12.8 per cent to £16.9 billion.
By contrast, the annual revenue for national newsbrands fell by 4.3 per cent, magazines by 7.2 per cent and regional newspapers by 3.5 per cent. Google and Meta’s ad revenue is ten times the amount spent with newspapers, magazines and radio stations combined.
Google, which is led by Sundar Pichai, brought in about £20 billion in UK advertising revenue
JAKUB PORZYCKI/GETTY IMAGES
Both companies have struggled to shake off criticism that they do not pay as much tax on UK revenues as British-based companies.
The Facebook UK accounts record that in 2023, the most recent year reported, the company paid £43 million of corporation tax on profits of £355.4 million, an effective rate of 12 per cent.
From April 2023, the main rate of UK corporation tax increased from 19 per cent to 25 per cent.
The latest Google UK accounts show the company paid £128.6m of tax on £502.2m of profit in 2023, an effective rate of 25 per cent. However, the year before, just £59.1m was paid on £342.1m of profit, a rate of 17 per cent.
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Both companies turned over £2.8 billion in the UK in 2023, suggesting they also paid tens of millions via the digital services tax, introduced in 2020.
Last week, the US Department of Justice said it would try to force Google’s parent company, Alphabet, to sell parts of its digital advertising business, after it was found to constitute an illegal monopoly.
Judge Leonie Brinkema found that Google had “wilfully” monopolised the online advertising market by buying competitors and using other anti-competitive tactics.
Google has rejected the finding, saying that it competes for online advertising spending with other tech giants such as Meta, Amazon and TikTok.
Meta said: “Meta has significant investments in the UK and employs thousands of people across our three London sites, including our recently built office campus in King’s Cross. We follow international and local tax rules, ensuring that we pay all taxes required in each of the countries where we operate. Last year, our effective global tax rate was around 20 per cent, which is in line with the OECD average.”
A spokeswoman for Google has previously said: “Our global effective income tax rate over the past decade has been close to 20 per cent of our profits, in line with average statutory tax rates.
“We have long supported efforts via the OECD to update international tax rules to arrive at a system where more taxing rights are allocated to countries where products and services are consumed.”
It is understood Google disputes the Press Gazette analysis.