Google and Facebook collected an estimated 40 per cent of total advertising spend in the Republic last year and a "whopping" 81 per cent of the online ad market, according to marketing group Core.
In its new outlook report, the media buyer forecasts that the “duopoly” will continue to increase their share of the market in 2020, after securing about €425 million in Irish advertising revenues in 2019.
Core, the largest buyer of advertising in Ireland, estimates that advertisers increased their investment with Google and Facebook by 7 per cent and 25 per cent respectively last year.
Those rates are forecast to grow by 6 per cent and 17 per cent in 2020, with Facebook’s growth driven by video advertising.
Overall, advertising spend in the Republic will grow by a “sluggish” 1.6 per cent in 2020, Core expects. The market will reach €1.065 billion this year, having grown 1 per cent in 2019.
The Irish market does not enjoy the same growth levels in advertising experienced in countries such as the US and the UK that benefit from "substantial spend by the tech giants, including Facebook, Amazon, Alphabet and Netflix", the group noted.
It cautions that its forecasts do not take account of the coronavirus outbreak, saying it is “too early to understand its potential impact”.
Core predicts that the online ad market will increase 7.5 per cent to €566.6 million this year.
“The dominance of the duopoly has a significant impact on the budgets available to Irish online publishers,” the group says in its Outlook 2020 report.
Television pressures
Elsewhere, it expects that television advertising, once the biggest part of the media market, will see revenues edge down 2.5 per cent to €205.7 million. This follows an estimated dip of 4.7 per cent last year.
“TV will continue to command a significant share of budgets for the top brands, but falling audiences, inflation and changing consumption patterns will put downward pressure on revenue for the foreseeable future.”
Radio revenues will also continue their recent pattern of decline, falling 6.4 per cent to €103.4 million, Core forecasts, while print spend is expected to drop 12.3 per cent to €92.1 million.
Better fortunes are predicted for the out-of-home advertising market, which is likely to increase by 3.2 per cent to €90.2 million, while sponsorship spend could rise 9 per cent to €205.9 million.
In his introduction to the report, Core chief executive Alan Cox highlighted what he called an "inconsistent standard of marketing education" across the sector.
Mr Cox said this was “holding the industry back” and contributing to “a worrying lack of confidence” in brand management, both within and beyond the marketing department.
“Executive opinion seems to be the pre-eminent factor in decision-making rather than scientific evidence, and trust in our occupation continues to lag behind other professions because we do not demonstrate mastery of marketing science.”
Core last year established a steering group of marketers, agency executives and media owners to explore and address the problem.
