Launched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe

Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year

Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination

Recently issued regulator rulings on Google, ad tech companies and Facebook challenge prevailing online advertising practices of obtaining user consent under the EU’s General Data Protection Regulation (GDPR)

Rulings from France on Google and ad tech partners of media owners called them out for inadequate disclosure to users, and excessive merging and processing of data

In a landmark precedent for Germany, the Federal Cartel Office found that Facebook lacked “freely given” consent from users, calling its terms “exploitative” and an abuse of its dominant position, also harming competitors

Smart speakers like the Amazon Echo and Google Home accelerated their prodigious rate of adoption in Q4 2018, and we expect they will soon be in 20% of UK homes

Amazon and Google price devices low to drive adoption to mass-market levels and win the race to own the home, in contrast to Apple’s profit-making strategy for its speaker

Echo’s main strategic benefits to Amazon are the scope for data collection and the intelligence it supports, and gatekeeping partners’ access to customers

Our central case forecast with orderly EU withdrawal predicts 2.7% growth for total UK advertising spend, down from 4.7% in 2018. We have a no-deal Brexit scenario that predicts a smaller advertising recession than in 2009, with total ad spend declining 3% and display down 5.3% in 2019

The total advertising figures partly mask the pressure on UK consumers, through an expansion of the measured advertising spend universe. This is due to significant self-serve online advertising growth by SMEs, and non-advertising marketing budgets moving to online advertising platforms

In a downturn, we’d expect advertisers to become more tactical, which would disproportionally affect display media including TV, which is further affected by declining commercial impacts among younger adults. Search and social advertising would see only small growth through the first year of a recession

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Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations

The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify

The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews

A strong UK labour market, with record low unemployment but historically high vacancies, has supported growth in the recruitment industry, though trends may be peaking as we reach unknown territory. These trends play out in the recruitment market before they become apparent in the labour market

Despite the fragmentation of the online recruitment listings marketplace, Indeed is well-placed to dominate this space due to its increased scale and aggressive investment strategy

Both Google and Facebook have announced their intention to move into the recruitment listings sphere, which may have consequences not only for classified expenditure but further up the value chain with the agency model. However, both giants have attempted to move into online classifieds before, with little demonstrable success

The slowing UK economy since Q3 2016 has had a knock-on effect on the property and autos marketplaces underlying UK classified advertising revenues, with house prices slowing, transactions stabilising (instead of rising), and new car registrations down sharply in 2017 to date. Recruitment activity by agencies and employers has instead been dynamic as the UK nears full employment

Advertisers in these verticals continue to switch expenditure from print classifieds to internet portals and search, which offer superior lead generation, analytics, and user experience. Only in property do local newspapers still fulfill an important estate agency branding function for the local area, although declining readership is blunting this value to advertisers

Portal dominance comes at a price to advertisers in property, where Rightmove has resisted agent efforts to lessen dependence by listing on other brands, as well as in used autos, where Auto Trader has long reigned supreme. Recruitment is a more contested market for portals, reflecting the diverse and fragmented nature of the jobs market, but Indeed has a strong grip on the low-end, while LinkedIn remains unchallenged in social recruitment advertising

Print advertising in the autos classifieds marketplace keeps declining, but significant continued online growth steadies the helm

Five years on from new car financing innovations, and exasperated by changes in consumer behaviour towards greener tech, the used car market is braced for a flood

Auto Trader’s competitors force it to keep innovating, although having saturated the market, its dominance gives it enough headroom to worry about the weather breaking

We estimate that UK online ad spend grew by 12.3% this year, with growth concentrated almost exclusively in mobile search and social in-feed advertising (particularly video), and mostly incremental to overall ad spend

Even after payments to publishers and distributors, Google and Facebook captured 80% of all net new spend in the market, and 96% of it flowed through their platforms

Despite improving standardisation and disclosure, the outstanding issues around measurement, the ad-tech supply chain, and particularly the obscure and growing Google/Facebook/Amazon segment, lead us to identify a large portion of digital advertising as a “grey market”: difficult to get a handle on, with uncertain beneficiaries and slippery definitions

Google has beaten Facebook in mobile revenue growth, and competes successfully in retail search with Amazon

Intelligent user interfaces based on machine learning have become a core competitive strength, with social and messaging the main remaining weak points

Rising political pressure due to Google’s growing scale and influence is now a bigger concern than commercial risk, as the threat of regulatory intervention limits strategic options in partnerships, M&A and integration