Facebook And Google’s Digital Ad Duopoly Threatened

While Facebook and Google have been dominant in the digital ad market of the United States for years, signs are emerging that their market share is being chipped away by the likes of Snapchat and Amazon. According to predictions by eMarketer, a research firm, the combined digital adverts market share of Facebook and Google in the United States will fall from 58.5% in 2017 to 56.8% this year. During this period the combined spending on digital ads in the United States will grow by close to 19% this year to reach a figure of $107 billion.

However the total ad revenue that Facebook and Google generate is still on the rise and there is no other firm which can boast of a market share that’s larger than 5%. The growth rate of the smaller rivals is faster though.

Declining market share

In the case of Google, its digital ads revenues are expected to grow by around 15% in 2018 to reach a figure of $39.92 billion. The revenues of Facebook are on the other hand expected to increase by 17% to reach a figure of $21 billion. This means that the market share that Google commands will be 37.2% having fallen from 38.6%. According to eMarketer the market share of Facebook on the other hand will decline from 19.9% to 19.6% marking the first time the research firm has projected a downward trend for the social media platform. The first time that the market share of Google fell was in 2016.

Relationships between the digital advertising duopoly and advertisers have been tense in the recent past owing to various issues including measurement discrepancies, or ads appearing in bad neighborhoods or contexts.

Amazon’s ad business

Though a small player compared to Facebook and Google, Amazon is emerging as threat with regards to digital ads. Amazon’s digital advertising business is projected to grow by 64% from last year in the United States and bring in revenues amounting to $2.89 billion. Per eMarketer, the online retail giant is the fifth-biggest in the digital advertising sector in the United States and its market share this year is expected to reach 2.7%. By 2020 eMarketer expects the online retailer to become the third-biggest by beating Microsoft and Verizon. By then its digital ads revenues in the United States will have reached a figure of $6.4 billion.

“So far, it’s been conservative in its ad load. It remains an open question as to when Amazon will take advantage of its significant reach and dominance in shopper data,” Monica Peart a senior forecasting director at eMarketer said in the report.

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