Google's UK Ad Revenues Surpass ITV1

31 October 2007

LONDON: The third quarter of 2007 witnessed what appears (superficially, at least) to be an epoch-ending event. Google UK overtook ITV1, Britain's largest commercial TV channel, in terms of headline ad revenues.

The Times, owned by Clan Murdoch, could scarce contain its glee when reporting the news, even to the extent of commissioning an analysis of the situation [by whom it omitted to say].

Tuesday's NewsCorp newsheet reported: "Google generated £327 million ($673.91m; €467.83m) in advertising between July and September, compared with an estimated £317 million for all of ITV1 across the UK during the same three-month period.

"That is the first quarter in which Google has overtaken Britain's top commercial channel and came despite ITV1 reaping an advertising boost from the Rugby World Cup."

However, as the "analysis" grudgingly conceded: "ITV as a whole can still claim to be Britain's biggest recipient of advertising because revenues will be about £1.45 billion this year with digital channels factored in."

It also noted: "The search engine does not receive all the money it generates, passing on about 29% to partners, meaning that on a net basis it will take nearly £1bn for itself."

News Corporation is not, of course, an impartial observer insofar as ITV is concerned, given that it holds a 14.9% stake in the struggling TV giant. That holding is currently the subject of an ongoing investigation by the UK Competition Commission.

However, a note of objectivity has penetrated The Times' spin, courtesy of Numis Securities analyst Lorna Tilbian.

She observes: "The two companies are in different businesses - one in classified and the other in display. Google has largely increased in size in a way that has helped expand the pie."

Intent on talking-up the potency of the internet - an area in which NewsCorp has invested heavily of late - The Times attempts a double whammy.

The first blow is factual: "Advertising in the UK grew by 3.1% to £9.1 billion in the first six months of this year, according to the Internet Advertising Bureau, using figures calculated by PricewaterhouseCoopers."

No argument about that. But The Times then follows through with a piece of syllogistic reasoning that only Humpty-Dumpty could equal.

"Without a 41% increase in the value of online advertising, to £1.3bn, total advertising would have fallen by 19%," it writes.

Does the newspaper seriously believe that without that vaunted 41% revenue uplift, the unspent £1.3bn would have vanished into a Black Hole rather than diverted into other media?

Let Humpty have the last word: "When I use a word," he told Alice, "it means just what I choose it to mean, neither more nor less."

Data sourced from The Times (UK); additional content by WARC staff