Google and Facebook dominate digital ad budgets, but Amazon is making major gains to emerge as a powerful third player and make the duopoly a triopoly in just a few short years.
The digital duopoly—also known as Google and Facebook—is still dominating ad budgets. And that doesn’t seem likely to change anytime soon. According to eMarketer, the duopoly accounted for just over 60% of digital ad spending in the U.S. last year. That massive share is projected to dip only slightly to 58.7% by 2021.
Data from 2016 showed that, for every incremental dollar digital marketers had to spend that year, the vast majority went to Google and Facebook, to the tune of 40 cents and 37 cents respectively. Source: eMarketer via the Wall Street Journal
When it comes to incremental budgets, Google and Facebook are even more of a juggernaut, taking in 77 cents for every new dollar allocated. Why is this? Incremental dollars often appear out of nowhere.
Hey, we came in under budget on this program and have an extra $10K we need to spend by the end of the quarter. Can you spend it?
This is not an unfamiliar scenario for most digital marketing managers. Usually, the path of least resistance is to pour that found money into something that is already up and running—and working. It helps that there’s usually a pretty steady supply of additional volume available, too.
Shifting to a triopoly
What does this mean for another publisher trying to get in on such tightly controlled action? Can Amazon really shift the landscape to a triopoly?
Just last month, eMarketer updated their forecast to show a slightly more bullish projection for Amazon. They stated: Back in September, we thought Amazon would earn 4.1% of US digital ad spending in 2018, and 5.5% this year. Changes to how we model Amazon’s ad earnings account for most of the difference in our estimates.
The new analysis now has Amazon taking 8.8% of U.S. digital ad spending this year. While still very small in comparison to Google and Facebook, the industry is taking note. This is a significant increase versus the original estimate. More importantly, it’s a rate of growth that can’t be ignored. Citi is even predicting that Amazon’s advertising business will grow to over $50 billion by 2028.
powered by Borlabs Cookie