Both Google's 10ks and the IAB/PwC report are out for the first half of 2008 so it's time to do some quick sums to see whether Google has once again increased its share of the UK's online ad market.
Last year, I estimated, Google generated £1.3bn in ad revenues in the UK - 78.1% of paid search revenues for the period or 45% of all online ad revenues - of which approximately £884m was retained by Google and £381m paid out to publishers as Traffic Acquisition Costs. (See my post from Feb08 and the footnote below for comments on how this figure was calculated and some caveats on methodological and data limitations.)
In 1H2008, according to its 1Q2008 and 2Q2008 10k filings, Google generated an estimated £798.6m from its UK search business - 81.4% of the £981m spent on paid search during the period or 47.5% of all UK online ad spend. By comparison, it took £598.1m in 1H2007, for year-on-year growth of 33.5% - significantly outperforming the UK's overall online growth for the period of 21% and meaning that not only has Google's share of UK paid search has risen from 78.5% to 81.4% but that its share of all online ad revenues has risen from 44.8% to 47.5%.
More interestingly, the share that Google pays out to its publisher network for running search ads has again fallen. In 1H2007 Google's retained UK revenues (ie ex-TAC) were £415.7m, with £182.4m paid out as TAC. For the half year just ended, Google retained £571m and paid out £227.7m in TAC, meaning that while retained revenues from UK operations rose 37.3% year-on-year, TAC rose only 24.8%. Google is making more money, and keeping more of it too. That, I guess, is the benefit of being - when it comes to search advertising - almost the only game in town.
(Some methodological notes. I've assumed for the $/£ conversion that revenues were accrued evenly over the 1Q and 2Q periods at the average daily Interbank conversion rate provided at Oanda.com. Technically the true sterling value of Google's 2007 revenues will differ from this calculation slightly, though perhaps not materially - it's hard to say without access to Google's books. TAC isn't broken out on a regional basis in Google's 10k so I've assumed that the global figure given for each period can be simply mapped onto the UK. Again, there's no reason to suppose this is perfectly accurate but difficult to improve without more data. The above should be read with these caveats in mind.)