Advertising: Meta’s growth slows in France in favor of TikTok

TikTok continues its rise in the French digital advertising market. In the first half of 2022, the Chinese application, which has nearly 15 million monthly active users in France according to Médiamétrie, thus captured two-thirds of the growth in the “social” segment, which climbed 27% on one year, to 1.2 billion euros of expenditure, according to the Observatory of the e-pub SRI, carried out by the firm Oliver Wyman, in partnership with Udecam. Until then, this segment was the preserve of Meta (Facebook).

Over the first six months of the year, the American group’s advertising revenues rose slightly below 5%. Just take a look at sponsored posts, an area in which the Menlo Park firm usually excels, to understand this slowdown in growth. They timidly increased by 1%, to 638 million euros, between January and June. At the same time, spending on running video ads on social media jumped 77% to 579 million euros. And unsurprisingly, it is above all TikTok that is benefiting from this enthusiasm for video, even if the platform has just abandoned its live e-commerce project in Europe and the United States, for lack of convincing results in the Kingdom. -United.

In this context, it is no coincidence that Meta wants to evolve to look more and more like TikTok. In a memo seen by The Verge, Facebook boss Tom Alison laid out the future outlines of the app, in what looks like one of the biggest overhauls in nearly five years. Recently, Instagram’s Reels had joined Meta’s other social network, but that obviously wasn’t enough. The instruction in the subtext is now clearer: the operation of Facebook’s algorithm must be as close as possible to that of TikTok.

However, the situation is not critical for Meta, just like Google and Amazon, the two other leaders in the French digital advertising market. The three groups still claim two-thirds of the sector, despite a share down from 68 to 66% over one year (2.8 billion euros). If Meta is jostled by TikTok on the “social” segment, Amazon is doing well in the “retail media”, with a market share of nearly 65%, far ahead of Carrefour Links or Leboncoin. As for Google, it is showing good momentum in the “search” vertical, which increased by 20% in the first half.

In a French market which represented 4.3 billion euros of expenditure in the first half (+19% over one year), the American trio recorded growth of 16% over the first six months of the year, against 26 % for other players in the sector. However, this did not benefit European companies, whose market share fell from 23% to 20% in one year. Worse still, 94% of the growth of the market since the beginning of the year has been absorbed by non-European companies, or 3.4 billion euros which have fallen into their hands.

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The French market is worried about the arrival of Netflix

This situation should not get better as Netflix, which has passed the milestone of 10 million subscribers in France, is preparing the launch of an offer based on advertising. In this context, the American firm would have engaged in discussions with players like Google. In France, we fear the birth of a new advertising ogre. Because if Netflix and Disney + seduce 20% of French households, they would be able to capture around 180 million euros in annual revenue by 2024, after a year of running-in. That is the equivalent of the French replay television market in its entirety in 2021. The two platforms could also absorb half of the growth of the online video advertising market, which represents 2 billion euros.

While the French market has more than doubled since 2017, its growth should slow in the second half. And for good reason, the effects of galloping inflation and the war in Ukraine will have an impact on digital advertising spending. Thus, the market should weigh 8.8 billion euros at the end of 2022, against 7.7 billion in 2021.

Despite an unfavorable international context, the sector can however count on an acceleration of the digital transformation of companies which is continuing in the post-Covid era and, above all, on the Football World Cup, which will take place in the fall in Qatar. A global event, the Mondial is a particularly lucrative event for digital advertising players. But again, Meta, Google and Amazon, as well as TikTok, should be on the prowl to carve out the lion’s share.