Online advertising in the UK

Online advertising in the UK

A report commissioned by the Department for Digital,

Culture, Media & Sport

January 2019

Stephen Adshead, Grant Forsyth, Sam Wood, Laura Wilkinson

plumconsulting.co.uk

About Plum

Plum is an independent consulting firm, focused on the

telecommunications, media, technology, and adjacent

sectors. We apply extensive industry knowledge, consulting

experience, and rigorous analysis to address challenges and

opportunities across regulatory, radio spectrum, economic,

commercial, and technology domains.

About this study

This study for the Department of Digital, Culture, Media &

Sport explores the structure of the online advertising sector,

and the movement of data, content and money through the

online advertising supply chain. It also assesses the potential

for harms to arise as a result of the structure and operation

of the sector.

Plum Consulting

10 Fitzroy Square

London

W1T 5HP

T +44 20 7047 1919

E info@plumconsulting.co.uk

Online advertising in the UK

Contents

Executive summary

1

2

5

Introduction

Taxonomy of online advertising

Market size and growth

Value chain and roles

Market dynamics

Money flows

Data flows

Ad flows and control points

Assessment of potential harms

5

6

7

8

11

12

14

16

17

Introduction

20

1.1

1.2

1.3

1.4

1.5

Terms of reference

Methodology

Caveats

Press publishers

Structure of this report

20

20

20

21

21

Taxonomy of online advertising

22

2.1

2.2

2.3

22

33

34

Online advertising formats

Targeting of online advertising

Future developments

3

Market size and growth

35

4

Value chain and roles

40

4.1

4.2

4.3

4.4

40

42

45

51

5

6

Overview of the online advertising value chain

The development of programmatic display advertising

Open display market value chain

Programmatic trading paths

Market dynamics

53

5.1

5.2

5.3

5.4

5.5

53

53

56

58

61

Overview

The role of major US internet companies

Publishers and social media platforms

Programmatic display intermediaries

Media agency services

Supply chain analysis

62

6.1

63

Money flows

? 2019 Plum Consulting

Online advertising in the UK

6.2

6.3

7

Data flows

Ad flows and control points

72

82

Assessment of potential harms

86

7.1

7.2

7.3

86

95

98

Potential individual harms

Potential societal harms

Potential economic harms

Appendix A

Market share data

106

Appendix B

Glossary

107

Appendix C

Gaps in the available data

109

? 2019 Plum Consulting

Online advertising in the UK

Executive summary

Introduction

The Department of Digital, Culture, Media & Sport (DCMS) commissioned Plum Consulting to provide an

independent analysis of the structure of the online advertising sector; the movement of data, content and

money through the online advertising value chain; and potential harms that can arise from online advertising.

This work feeds into the Cairncross Review into the sustainability of the UK press sector and the Government's

Digital Charter work programme to ensure the UK is the safest place to be online and the best place to start and

grow a digital business.

The project was conducted in November and December 2018 and involved a short review of publicly available

information and interviews with 24 industry stakeholders. There is limited available data about the UK online

advertising market ¨C consequently, we have made indicative estimates of certain data, such as market shares

and money flows. The online advertising market is highly complex ¨C consequently, we have had to generalise

and simplify in order to provide this baseline research. The market is evolving at a fast pace - this report

presents a snapshot of the market at the time of writing.

? 2019 Plum Consulting

5

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