Google and Facebook’s dominance in digital advertising predicted to grow
Google and Facebook will account for 84 percent of global spending on digital advertising in the outgoing year, reports the Financial Times.
Citing a research by WPP-owned media buying agency GroupM, it says worldwide ad spending, excluding China, will be around $100 billion this year.
In 2018, it’s predicted to increase by $23 billion or 4.3 percent. “Digital accounts for most of this growth and that means Google and Facebook,” the report quoted GroupM Futures Director Adam Smith.
The forecast indicates the two tech companies have become a digital duopoly affecting other companies in traditional and online media, says the Financial Times.
“Editorial media is picking up only a fraction of what is being spent,” with Google and Facebook “capturing a lot of share from other digital platforms and publishers,” it quoted Smith as saying.
Competition will solve the “market plurality”, according to him. “The most likely source of that competition is Amazon.”
Amazon, which started out as an e-commerce venture, has a trove of data as many of its customers use it as a search engine to get information on particular products.
After its Internet video on demand service, the company has now moved into live TV in the US with a deal to screen National Football League games. It will make $2.67 billion in digital ad revenues in 2017, according to research firm eMarketer.
GroupM Chief Executive Kelly Clark says the outgoing year has been a challenging one for advertising.
“Brands are operating in hyper-competitive and low-growth markets. Legacy media continue to be challenged by audience fragmentation and competition from the dominant digital players, and those giants have grappled with their own far-reaching success as consumers misuse their user-generated platforms, ” the FT report quoted him.
With their growing share in the digital advertising market, Google and Facebook, however, have been riddled with scandals this year over ads on its platforms.
Hewlett-Packard and Mars were among the companies which removed ads from YouTube and its owner Google after ads appeared with videos featuring children and sexualised comments.
YouTube also lost ads from brands after campaigns appeared with extremist content.
Facebook has faced question in US over ads and contents from Russian entities to influence American opinion ahead of the 2016 US presidential election.
France and Germany have said their election were also targeted, while a parliamentary panel in the UK has sought information from social networks, including Facebook on Russian activity in during the 2016 Brexit vote and the snap polls this year.
GroupM predicts TV ad spending to rise by 0.4 percent in 2017 and 2.2 percent in 2018. But digital ad investment will increase more rapidly— 11.5 percent this year and 11.3 percent next year, says the FT report.
Digital ad investment spending will exceed spending on traditional television by the end of 2017 in 17 markets, including the UK and Germany, according to the media buying agency.
