Home Articles AMAZON CHALLENGES GOOGLE AND FACEBOOK’S HOLD ON DIGITAL AD MARKET
Articles - Digital Marketing - December 24, 2019

AMAZON CHALLENGES GOOGLE AND FACEBOOK’S HOLD ON DIGITAL AD MARKET

Ad Age creates and shares an exclusive quarterly trend report with Ad Age Insider subscribers. As we reach the end of the year, Studio 30 contributing writer Michael Applebaum looked back at his 2019 forecast from last January. Already an Insider? Instantly download the trend report here. Or learn more about Ad Age membership levels and benefits here. Check back here next month for our 2020 forecast.

Ad spending growth hits the pause button. Facebook, Google and other tech giants find themselves in more hot water. Marketers struggle with stricter government regulations regarding data privacy. These are just a few of the predictions that Ad Age Studio 30 made in January in its annual trend report, “2019 Forecast: The Year Ahead.”

So which of those prognostications came to pass—and which were off the mark? You be the judge. Here are five major predictions from last January’s trend report and the events that followed.

Prediction: Global ad spending will see slower growth due to a lack of cyclical events and general economic uncertainty. The three major ad forecasters predict an average increase in spending of about 4 percent, citing potential weakness in the global economy due to factors including Chinese growth and looming trade wars.

What happened: Ad spending forecasts were generally on target. According to a report from GroupM, global advertising (excluding U.S. political advertising) will end this year with 4.8 percent growth, down from 5.7 percent in 2018. Throughout 2019, U.S. imposed tariffs and trade talks with China temporarily blunted markets and hampered some sectors of the U.S. economy, but conditions generally rebounded. Forecasters are now weighing the impact of spending for cyclical events (Olympics, the U.S. election) in 2020.

Prediction: Digital ad growth will remain strong, but is expected to slow into the single digits by 2021.

What happened: The slowdown has begun, but is perhaps not as pronounced as some forecasters were expecting. According to a new report from Magna,U.S. spending on digital advertising is expected to grow 16.1 percent this year (down slightly from 17 percent in 2018) and 10.9 percent in 2020. And eMarketer now says that the growth of global digital spending will remain in double digits for the next three years, eventually sliding from 10 percent in 2022 to 8 percent in 2023.

Prediction: Amazon will siphon more ad dollars from Facebook and Google, potentially threatening to break up the digital ad duopoly.

What happened: Amazon remains a distant third in overall digital ad revenues behind Google and Facebook, but its search advertising business is a growing threat. According to a recent report from eMarketer, Google’s $40.3 billion in search ad revenues equals a 73.1 percent share of the U.S. search ad market, while Amazon is expected to grow nearly 30 percent to $7.09 billion in 2019, reaching 12.9 percent of market share. By 2021, Amazon’s share is expected to grow to 15.9 percent, while Google’s share is expected to shrink to 70.5 percent. Ad Age recently reported on the five trends that have the potential to derail the Facebook-Google duopoly.

Prediction: Mark Zuckerberg and other tech titans will face intense public scrutiny for their growing socioeconomic influence.

What happened: During a congressional hearing

Read The Full Article

Leave a Reply