For years now, digital marketing experts have predicted that someday soon, digital marketing would overtake traditional marketing on television and in print. As it turns out, someday has arrived. In 2019, the digital marketing giants known as Facebook and Google will officially surpass TV, radio, and newspaper advertising, leaving it in the virtual dust.
The Proof is in the Spending
Per estimates released by eMarketer, advertisers across the United States are slated to spend $129 billion this year on digital advertising, which overtakes the $109 billion they plan to spend on traditional means of advertising. This is the first time in history that this has occurred; in fact, it’s the first time that more than 50% of the market will be dominated by the US digital ad business. The same source predicts that with each passing year, the gap in spending will continue to increase. In fact, by 2021, it is expected that advertisers will spend some $172.29 billion on digital ads compared to only $104.32 billion on traditional ads.
Facebook and Google
There’s little denying that Facebook and Google have driven these numbers forward for several years. Both multi-billion-dollar companies operate internationally. Surprisingly, back in 2015 (only four years ago), the digital advertising market was only about half the size of the traditional market, and most advertisers still preferred television commercials, print ads, and even radio ads to paid ads on sites like Facebook or Google. Since then, though, these two companies have played a tremendous role in those numbers creeping closer and closer together, and they are hugely responsible for this tremendous shift in the American marketing dynamic.
Fears of World Domination
Though it is an exciting time for advertisers, this number also spurs some fears among businesses that could be considered Facebook or Google competitors. Just last year, both Google and Facebook’s CEOs found themselves before Congress defending their companies’ ad businesses. Many believe that both companies will inevitably face some heavy regulation both at home in the US and abroad, their ad business was left untouched. In fact, in 2018, the two massive companies generated $65 billion in revenue between them.
This means that these two single companies generated more than 60% of the digital marketing revenue in the country last year – and this worries some. For 2019, their combined revenue is estimated at some $77 billion despite losing a percentage point or two of the overall market share. Smaller companies struggle to compete, but it’s the traditional media companies that are truly paying the price for Facebook and Google’s quest for world domination.
Amazon is Bridging the Gap
Back in 2015, Amazon only had 1.2% of the digital ad market in the country, but the same eMarketer estimates claim that this number will climb to 8.8% in 2019, making the retail giant a distant third competitor – but one that is closing in. The next two biggest contenders – Microsoft and Verizon – are actually slated to lose some of their market share next year. Microsoft’s share will fall from 2018’s 4.1% down to 3.8% while Verizon will fall from 3.4% down to just 2.9%. Believe it or not, Google’s share is expected to fall, too, if only very slightly. Their 38.2% market share for 2018 will likely be higher than the anticipated 37.2% for 2019.
What Consumers Want
Consumers, for the most part, understand that advertising is just a part of being online. Companies pay the websites hosting the ads for the right to the space, allowing those companies to get their ads in front of the people who might
find them relevant. Recently, Mark Zuckerberg, the founder and CEO of Facebook, spoke with a Harvard law professor and backed his long-time claim that Facebook must be free for users in order to connect the world. He also acknowledged some users’ concerns (and annoyances) with Facebook ads, but he made it clear that an ad-free Facebook experience is not likely to happen – at least not soon – since those ads keep Facebook funded.
This means that Facebook (and Google, and likely Amazon) will only continue to take on more of the digital marketing share in the US and around the world. Though consumers may have some power over which ads they see, and while continuously-evolving algorithms get better at predicting the sorts of ads that specific users should see, there remains a fine line between benign data collection for ad relevancy and invasion of privacy – something that Zuckerberg has promised to rectify with his social media platform by giving Facebook users more control over their experience.
2019 is slated to be an exciting year for advertisers, companies like Facebook and Google, and consumers alike. The ability to collect and advertise data in such a way that ad relevancy has skyrocketed in the last few years will continue to drive these huge companies forward, even though concerns remain about these same companies taking over the world, so to speak.