The Google-Meta Ad Duopoly is Ending: What Now?

Meta and Google's duopoly over U.S. digital ad spend is fading, according to Axios. The duo is expected to bring in less than half of U.S. digital advertising this year. While that may sound like a huge portion of the market, it's actually the lowest digital advertising the duo has earned since 2014.

So, who are the companies challenging it? Let's take a closer look.

Amazon

ECommerce empire, Amazon, is where 61% of U.S. consumers are starting their shopping journey - and companies are taking notes. It's no surprise Amazon reported a whopping $31.16 billion in revenue from ad sales in 2021 as their buyer journey has become easier and easier to press "add to cart." In fact, it's been so promising that Amazon has forecasted ad sales will generate more than $64 billion by 2026.

Why are advertisers flocking to Amazon?

Since Amazon is first and foremost a direct-to-consumer platform, the return on investment for advertisers is clear. Unlike Facebook or Google, Amazon has consumers who have already done their research and are ready to buy...right now. This generates a clearer, higher ROAS (Return On Ad Spend) and a lower CPM (Cost Per Mili). This means ads are aligned with exactly what the customer wants/what they've been researching at the right place and the right time.

While Amazon has become a guru of customer wants and needs, they aren't selfish with their success. Amazon has historically been more generous with sharing its data and its devoted customer base. This means brands that would otherwise have zero access to the eCommerce giant's loyal shoppers on any other platform have the chance to buy into a whole new audience. And that is currently Amazon's top goal:

According to Feedvisor, 83% of brands see at least a 4X return with Amazon Advertising - so their share of digital ad spend is likely to keep growing! These businesses start to see success through Amazon's reliable platform and gigantic ad reach while Amazon benefits by getting new product offerings and shops for more customers. It's a mutually beneficial relationship that has paved the way for Amazon becoming the leading eCommerce giant to challenge Facebook & Google's ad spend.

Walmart

On a smaller scale than Amazon, Walmart is also taking over the ecommerce world with its compelling ad platform. Its business ad revenue was reported to be at 2.22 billion U.S. dollars last year, and is projected to reach $61.15 billion by 2024.

So, why are advertisers choosing Walmart? Walmart is attractive to advertisers in the same way that it's attractive to customers, the lower prices and accessibility. Walmart has over 310 million active users and its ads are, on average, cheaper than Amazon's. Walmart's massive customer base provides a wide variety of personas with different budgets and the store offers multiple products for each budget. By having an equally big inventory to match their customers' needs, advertising on Walmart Marketplace is a sure way to reach the maximum number of people at the best rate possible.

TikTok

Though arguably a member of the "social media" category - TikTok has made its mark on the streaming and digital advertising world. TikTok has become an excellent platform for brands looking to target younger consumers, with one in two Gen Z users likely to buy something on the platform.

The ad budget for TikTok is rising steadily, experts say, with an average YoY growth rate of 50 percent (since 2020). Money that otherwise would've gone to Facebook or Instagram is now moving over to TikTok's shoppable experiences, in-feed ads, and creator marketplace.

Microsoft

Microsoft is planning on doubling its ad revenue from $10 billion to $20 billion (timeline set yet) to become the sixth-largest digital advertiser. So how will they manage that? The tech giant has multiple ad revenue streams, including Bing (which just integrated ChatGPT into its capabilities), Xbox, MSN, and several others.

To the surprise of many - Microsoft is also the official ad tech and sales partner for Netflix's ad-supported subscription tier. This is partially because Microsoft acquired programmatic tech leader Xandr from AT&T back in June of last year (giving them a legitimate supply-side advertising platform) and because Microsoft does not have its own streaming library like Google's YouTube to compete against.

Implications for businesses

• Amplifying your content is more complicated than ever. Relying on paid media strategies used to mean investing heavily into Google and Meta. And for many businesses, it still does. But clearly the landscape is changing. The rise of TikTok, retail media platforms such as Amazon and Walmart, and connected TV has changed the game considerably. Audiences have more options to search and find content. And businesses have more options to connect with them.
• Adapting your content requires more consideration. An A+ banner ad on Google might flop on Snap. A video on YouTube might be the wrong format for TikTok and vice versa. A one-size-fits-all approach for creating content won't work in a post-duopoly world. Adaptability is crucial.
• Sharing content means doing more homework about your audiences. In a fragmented world, businesses need to take a closer look at where their audiences actually spend their time and to what purpose. TikTok is being used for every conceivable business need now, from recruiting talent to generating commerce. Businesses need to lean strongly into analytics to understand their audiences' journeys.

Contact Investis Digital

We believe that the proliferation of platforms will ultimately require businesses to take a more disciplined approach to building and storing content assets. Shared content repositories will make it easier for organizations to re-use and customize assets for multiple audiences and platforms in a cost-effective matter. Learn how Investis Digital can help you by contacting us.

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