Publishers may be celebrating the recovery in the advertising market, but they won’t be the biggest winners. Digital ad revenue earned by what has become known as The Triopoly – Google, Facebook and Amazon – will make up 64% of all US digital ad spending this year, about the same share as 2020 and slightly up on 2019.
- Total US digital ad revenue this year is projected by eMarketer to be worth $211 billion, up 38.3% on 2020’s total. These current projections from the advertising and marketing information site are $20 billion higher than forecasts made earlier in the year. The uptick is due to stronger-than-expected performance from major digital ad companies and ‘significant growth’ in ad prices.
- Looking ahead to 2023, Google is expected to lose share of the digital ad market, from 28.6% in 2021 to 26.4% in 2022. Facebook’s share is forecast to stay fairly steady, around 24%. Although smaller, Amazon’s share of the market is growing steadily, from 7.8% in 2019 to 14.6% in 2023. The share of the US digital ad market held by non-triopoly companies seems to have settled at about 35%.
- Looking to 2025, eMarketer believes display will pick up share of the overall ad market. Search’s share, which is currently flat from 2020 to 2021, before falling slightly through the remainder of eMarketer’s forecast period. The forecast is for total US digital ad to pass $300 billion in 2025.
- Amazon is at the forefront of a significant area for growth in digital ad revenue – brand advertising associated with online retail operations and service companies. The biggest retail media network by far is Amazon, but others, from supermarket chain Walmart to food delivery service GoPuff are also staking their claim.
- Adage is reporting that every two or three months a new retail ad network is established. Online merchants, who saw enormous growth during the pandemic, are leveraging the data they hold on shoppers to deliver targeted ad placement for the brands they host in their ecommerce stores.
- Writing on the WARC website, FairPrice Group’s Vivek Kumar says:
The concept of retail media networks has been around for a few years but most brands are just getting to the point where they have the right tech stack and the right mindset to make the most of the opportunity.
Big Tech backlash?
- Despite the rise of the retail media networks, Big Tech has an iron grip on the digital advertising market. Tech companies – from Yahoo to AOL – have long dominated the digital ad space, but where previous generations controlled the audiences, the Triopoly controls audiences, content distribution, ad sales and ad serving.
- With the platforms controlling so much of the market – 64% in revenue terms in the US and 80% in the UK – calls to challenge their dominance are getting stronger. Earlier this year Andreas Coscelli, CEO of the UK’s competition regulator, CMA, argued that a shake-up of the digital advertising market was required.
- Discussions on breaking up the businesses are now common, especially after the recent revelations against Facebook. However detailed proposals on exactly how that would be done are rare. And the numbers are hard to argue with so Google, Facebook and increasingly Amazon, are dictating the terms of the discussion.