Meta and Alphabet, parent companies of Facebook and Google respectively, are no longer dominating the digital advertising market, which they had ruled for years. The duopoly has been affected by the rapid growth of competitors Amazon, TikTok, Microsoft and Apple. The information is from the newspaper Financial Times🇧🇷
According to the research group’s analysis Insider Intelligencethe sum of the parent companies’ ad revenue shares should drop 2.5 percentage points, to 48.4% in 2022. It is the 1st time that both do not hold a majority market share since 2014.
The group predicts Google and Meta ads will grow by just 3% and 5%, respectively, in the United States. While at least 8 of your competitors will have double digit gains.
The recent revenue drop represents Meta and Alphabet’s 5th consecutive annual decline in the digital advertising market. In 2017, the participation of big techs dropped from a peak of 54.7%, and is forecast to reach 43.9% by 2024. The performance of both decreased by 1 percentage point worldwide this year.
To Financial TimesGoogle’s head of ads, Jerry Dischler, said that the rivalry between competitors reflects in a “extremely dynamic ad market”.
“Four years ago, you wouldn’t be talking about [TikTok ou Amazon] in advertising. It’s really telling that more and more people are recognizing that advertising is a great, scalable business model.”he stated.
Dischler also says that Google was “Working hard” to expand its ad business into online commerce, where it partners with retailers, and into privacy advertising.
Meta’s chief executive, Mark Zuckerberg, said the recent drop stems from Apple’s privacy changes that make it harder to track users and target advertising, as well as the growing popularity of TikTok’s video app – owned by Chinese parent ByteDance. .
Zuckerberg has often spoken about the “Conflict of interests” from Apple, criticizing the company for charging “monopoly annuities” and stifle innovation. Meta faces difficulties in adapting ads to people due to the new rules of the iOS system. This scenario would have contributed to the fall of the group’s shares.
Insider Intelligence estimates that the operations of competitors operating in the market are expected to increase, despite the fact that many of these companies’ shares are currently small. The biggest growth will be from Walmart (42%), followed by TikTok (36%), Spotify (30%), Apple (26%), and Amazon (19%).
Amazon’s introduction into the digital ad market has had a strong impact on both Meta and Alphabet. In 2015, the company founded by Jeff Bezos reinforced its activities in the sector and went from less than US$ 1 billion in sales to US$ 38 billion (R$ 195.4 billion at current prices) this year.
In addition to the retailer, Apple also presented an evolution in its earnings: US$ 7 billion (R$ 36 billion in the current quotation) in 2022, against US$ 2.2 billion in 2018. Although the collection is only 1.2% of the global market, is already higher than Snapchat and Pinterest’s earnings combined.
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