After years of dominance, Meta and Alphabet have lost control of the digital advertising sector as a result of rivals like Amazon, TikTok, Microsoft, and Apple entering the market at a rapid rate of growth.
According to research firm Insider Intelligence, the market share controlled by Facebook’s parent company Meta and Google’s owner Alphabet will drop by 2.5 percentage points to 48.4 percent this year, marking the first time since 2014 that the two companies will not possess a majority stake.
The duopoly’s market share has plummeted from a peak of 54.7 percent in 2017 and is predicted to shrink to 43.9 percent by 2024, making this the sixth year in a row that it has decreased. This year, Meta and Alphabet’s global market share fell 1 percentage point to 49.5 percent. Google’s head of advertising, Jerry Dischler, told the Financial Times that the tough competition from new competitors indicates a “very dynamic ad industry.”
Regulators in the US and Europe have intensified their antitrust investigations, going after Google for allegedly favouring its products over those of competitors.
The duopoly’s market share will have decreased for the fifth time; it peaked at 54.7 percent in 2017 and is expected to drop to 43.9 percent by 2024. The combined market share of Meta and Alphabet fell by 1% to 49.5% this year. The Financial Times quoted Google’s head of advertising, Jerry Dischler, as saying that the tough competition from new competitors indicates a “very dynamic ad industry.” As part of their increased antitrust investigation, regulators in the US and Europe are pursuing Google for allegedly favouring its products over those of competitors.
The EU’s watchdogs filed a complaint against Facebook owner Meta in December on suspicions that the social network’s classified ad service is unjust to competitors. Even as businesses around the world reduce their advertising spending in reaction to rising interest rates and high inflation, tech groups are competing more fiercely than ever for a piece of the $300 billion digital advertising industry.
Apple and Amazon have grown their advertising departments. In July, Netflix made the announcement that it will work with Microsoft to create a streaming service tier that would be supported by advertisements. Mark Zuckerberg, the CEO of Meta, has attributed recent revenue declines on both the rising popularity of TikTok, an app for viral videos, and Apple’s privacy changes that make it more difficult to track users and target advertising.
