Google and Facebook intensify their duopoly on digital advertising

Image: CIO/Thinkstock

16 March 2017

Google and Facebook are deepening the stranglehold they have on the U.S. digital advertising market. The companies’ duopoly over digital ad revenue will grow this year as ad spending reaches $83 billion, marking a 15.9% increase from 2016, according to a new report from eMarketer.

Google continues to dominate search engine advertising and Facebook’s share of display and mobile ads is growing, according to the firm’s latest forecast. Google is projected to end the year with 40.7% of the digital ad market in the US, while Facebook eats share from competitors to reach 19.7% of the market.

Facebook’s US digital ad revenue is also growing more than twice the rate of Google’s, according to eMarketer. Facebook is on pace to increase ad revenues by 32% while Google is expected to increase about 15%, the firm predicts.

“Facebook’s users are increasingly captivated by videos on the platform – not just on Facebook, but on Instagram as well,” eMarketer forecasting analyst Monica Peart wrote in the report. “Video, both live and recorded, is a key driver of growing user engagement and advertiser enthusiasm.”

Facebook’s US display ad business is projected to reach $16.33 billion this year and capture 39.1% of the market, as Google, Yahoo and Twitter are all expected to decline on the display advertising front. Google’s share of the display market will drop to 12.5% on $5.24 billion in revenue, according to eMarketer’s data.

Meanwhile, Snapchat is in position for “explosive growth this year” with US ad revenues jumping 157.8% to $770 million, eMarketer predicts. The company’s ad business still pales in comparison to others, accounting for 1.3% of the US mobile ad market this year.

“Google’s dominance in search, especially mobile search, is largely coming from the growing tendency of consumers to turn to their smartphones to look up everything from the details of a product to directions,” Peart wrote.

Overall, Google controls nearly a third of the US mobile ad market while Facebook is banking almost a quarter of mobile ad spending.

IDG News Service

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