Facebook and Google’s dominance in online advertising continues to swell.
New data suggests that the two tech giants accounted for 73% of all U.S. digital advertising, according to Pivotal’s Brian Wieser in a note to clients, up from 63% in the second quarter of 2015.
That’s a significant leap and highlights why many see digital advertising as a two-pony show, with Facebook and Google taking most of the money while other platforms like Twitter and Snapchat fight publishers for the scraps.
In the face of that duopoly, there’s also been increasing interest around Amazon’s ad business, which is starting to be taken more seriously by brands.
Wieser comes to his estimates by looking at new data from the Interactive Advertising Bureau that shows that digital advertising grew 23% in the second quarter of 2017 to $20.8 billion in ad revenue. Wieser estimates that Facebook and Google account for 83% of that growth.
Rather than using the new data to push investors to buy stock, Wieser recommends caution because he believes that the we’re approaching the saturation point when increases in digital ad budgets won’t lead to increased sales.
“Growth rates are remarkable, but also highlight risks around digital media owners – and Facebook and Google in particular – saturating digital media budgets in years ahead, and reinforce our cautious views on stocks in the sector at current levels,” he writes.
That’s why Facebook in particular has “become more aggressive in finding ways to capture television advertising budgets,” like with its new “Watch” video offering.
Source: CNBC
