Comisión Nacional de los Mercados y la Competencia
Estudio sobre las condiciones de competencia en el sector de la publicidad online en España

Online advertising and risks to competition

The National Commission of Markets and Competition (CNMC) published a report analyzing pros and cons of the online advertising sector in Spain. The sector, with strong growth in an increasingly digital economy, "tends to a notable concentration in very few players, estimating that two companies (Google and Facebook) accounts for more than 70% of revenues in the sector in Spain". The report provides some recommendations to address the challenges and potential competition issues arising from this situation.

The report offers interesting data and conclusions on the situation of the online advertising sector in Spain:

  • The volume of revenue from online advertising exceeds that of traditional media (such as television, radio or press) and offers higher growth. According to CNMC´s estimates, market revenue in Spain in 2019 could have exceeded €3.45 billion (compared to € 3.2 billion of revenue for the rest of traditional media) with an annual growth of close to 20% in recent years. These revenues are generated in two ways:
    - Search advertising, in regard to the ads that can be associated with the search for keywords in a general search engine.
    - Display advertising, coming from the ads that may appear in different formats (video, banners, "native" advertising ...) during our browsing on web pages and mobile applications (apps).
  • The online advertising sector tends to be highly concentrated in very few players that can pose risks to competition. According to CNMC´s estimates, "two companies (Google and Facebook) account for more than 70% of revenues in the sector in Spain". By segments:
    - Google would concentrate more than 90% of the revenues from search advertising and between 50% and 70% in the different intermediation services in the open display
    - Facebook accounts for more than 40% of revenue in display advertising.

According to the CNMC, "these figures are truly exceptional, taking into account that it is a market that emerged in the last 20 years and in which there are no relevant regulatory barriers" and they can give rise to problems of opacity and lack of transparency or generate incentives or risks of competition-distorting behavior, reducing the consumer welfare and the advertising role to promote competition in the economy.

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