By Jeffrey Bayram
Most are familiar with the current state of digital advertising, and the prominence of a few big names in the business. eMarketer estimates that in 2019, Google and Facebook were involved in over 60% of all digital ad spend. Meanwhile, Amazon accounted for about 7.6%. While this is in fact a huge difference in numbers, this 7% is an exceptional portion of a booming business. Google and Facebook have been the face of digital advertising for years, and only now is there another name in the game.
This isn’t so much of a dramatic change, and instead has been more of a gradual shift. Five or six years ago, Amazon was not even in the discussion for top digital ad platforms. But with the new era of “Amazon Advertising,” the industry is beginning to veer.
The Current State of the Ad Marketplace
The mutual growth of Facebook and Google’s ad businesses is perhaps because both have a major focus in different digital channels. Google is hailed as the king of search and Facebook excels with social media. Now Amazon is succeeding in “ecommerce channel advertising” which are ads integrated into an online marketplace (go figure).
From 2018 to 2019, eMarketer estimates that Amazon acquired an additional 3.5% market share in US digital ad spend. This may not seem large at a glance, but in a multi-billion-dollar industry, this kind of growth over a single year is astronomical. Comparatively, the duopoly grew to acquire an estimated 3.2% market share. But keep in mind that this is for two major advertisers as opposed to one. Also remember that these numbers include ads from Facebook’s Instagram and Google’s YouTube, which are major ad platforms on their own.
While one Q4 2019 eMarketer estimate predicted that Google and Facebook would retain over 60% of the market share until 2021, at the current rate of growth, it’s entirely possible that Amazon ends up taking a much larger share, much faster.
The Threat of a Cornered Market
Google, Facebook and Amazon are household names in this digital era, but marketers need to remain cautious, as they should with any oligopoly. Despite their many advantages, these “big three” have faced scrutiny for their shortcomings.
In the past, advertisers have complained about Facebook having blackouts on their ad platform for extended periods of time, which resulted in lost ad dollars for marketers. However, these marketers have nowhere else to turn when there simply isn’t another channel that offers the same level of robust targeting that Facebook provides. Advertisers need to remember that brands with all their media running on a single platform will be at the disposal of that platform. Facebook, Google, and Amazon face challenges just like everyone else, so it’s important not to put all your eggs in one basket!
With some industry professionals already relabeling these giants as a triopoly, advertisers need to remain vigilant as these brands grow and are expected to account for nearly 70% of all digital ad spend in 2020.
What does this mean for NSA and you?
Like them or hate them, Facebook, Google, and Amazon will all
be a part of the digital advertising environment for years to come, and NSA doesn’t
plan to shy away from them. As we continue to work on and off these platforms,
our team has developed a healthy mix of criticism and confidence.
Facebook, Google, and Amazon all boast extremely robust advertising platforms, but they are not the right fit for every campaign. Our flexibility doesn’t corner us into using any one platform, so we are in a great position to help brands navigate the space. To learn more about how we do this, contact us at NSAMedia.com.