Facebook and Google, aka “the duopoly”, are still the dominant players in the US digital advertising market, but “faster-than-expected growth” of smaller players in the space, including high-profile names such as Amazon and Snapchat, has prompted eMarketer to downgrade its estimates.
EMarketer estimates that Facebook and Google will collectively capture 56.8% of the US digital advertising market in 2018, down from 58.5% last year, with the pair capturing 48% of all new spend this year.
Google is still the dominant side of the pairing – often referred to as “the duopoly” given they represent over 50% of the market – but eMarketer has forecast that their collective prevalence in the market is on the wane. Albeit, the pair will still account for over 50% of all US digital ad spend in 2020, according to the latest eMarketer numbers (see chart).
Facebook will generate $21bn in US digital ad revenues in 2018, up 16.9% from 2017, while Google will rake in $39.92bn in total US digital ad dollars in 2018, up 14.5% over 2017, according to eMarketer.
Monica Peart, eMarketer's senior forecasting director, noted how Facebook’s slowdown may be due to “News Feed ad prices reaching their limit”, but this will be offset by the increases in its Instagram ad spend.
However, Peart went on to observe that growth from rivals such as Amazon, Snapchat and Twitter is likely the biggest contributor to the diminution of “the duopoly”.
Amazon’s ad revenues will leap 63.5% year-over-year to hit $2bn granting it a 2.7% share of total US digital ad spend, with this number increasing to 4.5% of all online US ad dollars by 2020.
“Amazon finds itself in fifth place among the top digital ad sellers in the US, and it's on track to be No. 3 by 2020 — surpassing both Oath and Microsoft,” Peart added.
“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 rich shopper data to ramp up the placement of ads in other areas.”
Similarly, Snap’s US ad revenues will jump 81.7% this year, with the total amount of spend coming to $1bn, granting it a 1% share of the market.
“Twitter will see its US ad earnings decline for the second consecutive year in 2018, falling by 4.9% to $1.12bn,” reads a blog post announcing the updated forecast.
“The company’s share of the digital ad market will slip to 1.0% this year — below the 1.5% eMarketer predicted in September. We expect Twitter to return to positive growth in 2019.