Big Tech continues to dominate ad spend, but the leaderboard will look a little different this year as top dog Google is tipped to lose market share to the chasing pack, with Amazon and Facebook snapping at its heels.
EMarketer today released figures that forecast Google’s ad revenues to drop 5.3% in 2020 to $39.58 billion, putting its overall U.S. market share at 29.4%. It would be the first time Google’s ad revenues have not increased year-over-year.
By contrast, Facebook and Amazon—the second- and third-biggest recipients of ad spend—are predicted to grow 4.9%, and 23.5% respectively during the period:
The research firm’s original predictions did not account for the global pandemic, with eMarketer later forecasting a downward revision for each member of the triopoly. The total U.S. ad market is still expected to grow, by 1.7% to $134.66 billion.
Collectively, Amazon, Facebook and Google’s market share will grow by 0.2% this year, the smallest gain in a decade, according to eMarketer.
“Google has been growing its net U.S. ad revenues at a slower rate than the overall digital ad market since 2016, so this year will continue a trend of Google losing digital ad market share in the U.S.,” said Nicole Perrin, eMarketer principal analyst at Insider Intelligence, in a statement.
Facebook’s share of ad spend will be buoyed by the growing popularity of Instagram, but it is in the paid search rankings where the most notable budgetary shifts were observed:
This is due to Amazon continuing to make inroads into Google’s market dominance, with eMarketer analysts noting how the ecommerce giant is less exposed to the economic impact of Covid-19.
“Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry,” added Perrin. “Ecommerce-related ad spending has also been dampened to some extent: Amazon reportedly pulled its ads from Google search earlier this year as it struggled to meet customer demand for its ecommerce services.”
Google parent company Alphabet posted revenues of $41.2 billion for Q1 2020, with leadership describing the period as “a tale of two quarters” as brand spend plummeted while performance budgets “held” as Covid-19 lockdown measures began. It was later announced that Google would make significant curtailments to its earlier planned marketing spend and recruitment plans.
Separately, Google is faced with a complex balancing act that requires it to satisfy investors with continued revenue growth while placating growing calls for better data privacy from the public, which would negatively impact its ad stack’s ability to target and measure the performance of ads. This is in addition to the rising tide of scrutiny from antitrust bodies as multiple parties reportedly probe Google’s impact on market competition.