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Report: Facebook and Google Are Losing Ad Dominance

Marketing

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A new report from eMarketer suggests that the Big 2 will experience dips in market share over the next few years.

According to a new eMarketer forecast, the Big 2, that is the top two companies in terms of digital advertising revenue, Google and Facebook, are expected to lose market share by 2021.

The duopoly enjoyed a combined share of U.S. digital ad spending of 58.5 percent in 2017, but this is anticipated to fall to 56.8 percent over the course of this year, translating into a nearly two percent loss. By 2020, this will drop an additional point and a half to 55.3 percent.

That said, eMarketer analysts anticipate a rebound beginning sometime in 2020. And beyond that, while their dominance will slightly decrease, both platforms are expecting to see significant revenue increases over the next several years.

Image via MediaPost

The declines are not a function of an overall decrease in digital ad spend; conversely, overall spending will hit $107 billion in 2018, reflecting a 19 percent increase Instead, The Wall Street Journal points to rivals like Amazon and Snapchat as the main reason, suggesting that advertisers are increasingly testing platforms outside of the Big 2 in their efforts.

What has not been factored into this estimate is marketers’ growing wariness toward the Big 2 with regards to brand safety and an increasingly alarming public perception that these properties have amassed too much power with little regulation from outside forces. These concerns have already made a financial impact on tech stocks as of late.

Following widespread public outcry in the wake of the Cambridge Analytica scandal, Facebook shares fell 8 percent in a single day. The news has sparked a far-reaching conversation about Facebook’s ability to monetize user data—and do so in a seemingly unfettered fashion.

Users have also taken to Twitter to announce their plans to #deletefacebook. One significant member of the movement has been WhatsApp co-founder Brian Acton. WhatsApp was acquired by Facebook in 2014 for $16 billion.

Google, and more specifically its video behemoth YouTube, are also on shaky terms with leading advertisers. With leading brands threatening to reduce spend on the platform, YouTube has had to revise and bolster its approach to brand safety.

Still, even amid the controversies, Google and Facebook are regarded as the most effective digital partners for marketers when it comes to both scale and targeting capabilities. It will be interesting to see how some of the more esoteric conversations around the Big 2’s role in society will influence user behavior, and ultimately advertisers’ reliance, on the platform.

Meanwhile, competitors like Snapchat are reaping the benefits from this correction gaining nearly half a point per year of the market share. As depicted in the chart below, the company held 0.6 percent in 2017 and this is expected to climb to 2.2 percent by 2020.

Image via MediaPost

For more on the complex role of social networks in society, join us at SMWNYC this April (24-27). Register your pass today!




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