Google ad revenues to dip as market becomes 'triopoly': tracker

Amazon is gaining ground while Google is seeing declines in digital advertising, a market which has evolved into a "triopol
Amazon is gaining ground while Google is seeing declines in digital advertising, a market which has evolved into a "triopoly" with Facebook, according to a market tracking firm

Google is expected to see its first decline in US ad revenues this year as the coronavirus pandemic hits travel advertising, a market tracker said Monday.

New research by eMarketer indicates Google will still be leading but with a smaller share as the evolves into a "triopoly" with Facebook and Amazon.

Google's net US digital ad revenues will drop 5.3 percent to $39.58 billion to bring its market share down to 29.4 percent, according to the eMarketer forecast which was sharply revised due to the pandemic.

Google's decline is "primarily because of a sharp pullback in travel advertiser spending, which in the past has been heavily concentrated on Google's search ad products," said eMarketer analyst Nicole Perrin.

"Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry. E-commerce-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 e-commerce services."

A big part of the decline will come from "search advertising," or paid messages deployed by Google when a user enters a search query.

Search ad revenue, in which travel is a major component, is expected to drop by 7.2 percent in the US, eMarketer said.

Facebook is expected to see growth in its US ad revenues of nearly five percent to $31.43 billion, driven by Instagram, according to the report. That would give Mark Zuckerberg's firm a 23.4 percent market share.

Amazon, meanwhile, is extending its strong growth in online advertising with an expected 23.5 percent rise to $12.75 billion, putting its market share at 9.5 percent, eMarketer said.

Until recently, analysts had described the digital ad market as a duopoly dominated by Google and Facebook, but Amazon has been rising quickly.

Google has been growing at a slower rate than the overall digital ad market since 2016, " so this year will continue a trend of Google losing digital ad in the US," Perrin said.


Explore further

Amazon eating Google online search ad share: eMarketer

© 2020 AFP

Citation: Google ad revenues to dip as market becomes 'triopoly': tracker (2020, June 22) retrieved 26 October 2020 from https://techxplore.com/news/2020-06-google-ad-revenues-dip-triopoly.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
7 shares

Feedback to editors

User comments