Regulators around the world might at last have Google and Facebook in their sights but the duopoly’s grip on the online advertising market is set to get even tighter, with the latest figures suggesting the duo will account for over three-fifths of Internet marketing spend this year.
According to a new report from Warc, their dominance is, for the first time, reducing the amount of ad money available to other online media owners.
The latest Warc Global Ad Trends focuses on the duopoly and says that of the $590.4bn (£448bn) spent on all forms of advertising worldwide last year, $144.6bn (£110bn) went to Google and Facebook, which equates to almost 25% of the total spend.
The duopoly’s adspend share is up from 20.3% in 2017 and is more than double the 10.8% recorded in 2014. Warc predicts a further increase to 28.6% – equivalent to $176.4bn (£134bn) – this year.
When it comes to the Internet advertising market, the duopoly took over half (56.4%) of ad money in 2018, a share which the report predicts will rise to 61.4% this year. Figures from eMarketer, also released this week, predict the duopoly will account for nearly 65% of UK online ad market by 2021.
This growth is putting the squeeze on other online media owners, as the pool of ad money available to them is now in decline for the first time, down 0.7% to $111bn (£82.4bn).
Warc data editor James McDonald, author of the report, said: “One of the main reasons for the duopoly’s success is their creation, and subsequent ownership, of the digital formats perceived to be most effective by adland’s decision makers: paid search and social.
“Google dominates the search engine market, handling almost all mobile searches worldwide and nine in ten on desktops. Meanwhile, ad buyers can target Facebook’s 1.48 billion daily users by leveraging a rich cache of personal data
“Beyond major brands, the accessibility of the duopoly’s ad buying tools has attracted a long tail of small- and micro-advertisers, creating a competitive advantage which has been core to revenue growth.”
These concerns have sparked a review into online ad regulation by the Department of Digital, Culture, Media & Sport, and the Information Commissioner’s Office is on a fact finding mission to determine how best to police the programmatic advertising market.
Meanwhile, last week, the UK’s Centre of Data Ethics & Innovation was briefed to investigate the role of behavioural data in micro-targeting, in a move which could ultimately lead to a major clampdown on the practice.
Writing for Decision Marketing, Conversant UK senior vice-president of media Elliott Clayton said: “Without challengers being able to rise to prominence, there’s less incentive for the duopoly to evolve their advertising and marketing technologies.
“Unfortunately for advertisers, this means that outdated metrics such as ‘clicks’ or ‘likes’ have stuck around long past their sell-by date, potentially because by limiting which metrics they give advertisers, their services can seem more impactful.”
Digital ad duopoly has stifled the industry for too long
New Govt probe to scrutinise behavioural data market
Lords report calls for new crackdown on marketing data
Tech giants ‘must hand over customer data to rivals’
ICO taps up industry for probe into programmatic ads
IAB in dock over sector’s ‘systemic’ breaches of GDPR
$273bn behavioural ad industry ‘is in breach of GDPR’