Google and Facebook Tighten Grip on US Digital Ad Market

Google and Facebook’s grip on the US digital advertising market has exceeded projections for 2017, solidifying their status as the "digital ad duopoly." According to eMarketer’s latest forecast, the two companies are expected to account for 63.1% of all US digital ad spending, up from an earlier estimate of 60.4%. This growth highlights their unmatched ability to meet advertisers’ demand for precise targeting. Facebook excels in interest-based targeting, while Google leverages its search data to maintain its competitive edge.

Google: Leading the Digital Ad Market

Google, including YouTube, is set to generate $35 billion in total US digital ad revenue in 2017, an 18.9% increase from the previous year. This growth pushes Google’s share of the US digital ad market to 42.2%, slightly surpassing earlier predictions. A significant driver of this expansion is mobile advertising, which, for the first time, will represent more than half (54%) of Google’s ad revenue. Mobile ad revenue has grown 28.6% year-over-year, reaching $18.9 billion, reflecting the broader shift toward mobile-focused ad strategies.

Facebook: Expanding Influence Through Mobile and Instagram

Facebook is poised to capture over 20% of US digital ad spending in 2017 for the first time. The company’s total US ad revenue is expected to grow by 40.4% to $17.37 billion, solidifying its position as the second-largest player in the digital ad market with a 20.9% share. Mobile ads play a critical role, contributing $15.28 billion—88% of Facebook’s total ad revenue – and boosting its US mobile ad market share to 26.8%.

Instagram, Facebook’s subsidiary, continues to experience rapid growth. In 2017, Instagram’s mobile ad revenue is projected to grow 90.7% year-over-year to $3.08 billion, securing 5.4% of the US mobile ad market. The platform’s creative capabilities and popularity among younger audiences make it an increasingly valuable asset for Facebook.

Snapchat: Strong Growth, but Challenges Persist

Snapchat’s US ad revenue is expected to grow by 115% in 2017, reaching $642.5 million. However, this figure falls short of eMarketer’s earlier projection of $770.1 million. Snapchat’s share of the US mobile ad market will be 1.1%, slightly below the 1.3% previously anticipated, and its overall share of the digital ad market will be 0.8%.

Despite these challenges, Snapchat continues to attract advertisers with its youthful, highly engaged user base. Two thousand seventeen marks the first year more US teens are predicted to use Snapchat than Facebook or Instagram. However, slow international expansion and lingering advertiser skepticism about its effectiveness hinder its revenue potential.

Twitter: Struggling to Keep Pace

Twitter faced significant setbacks in 2017, with US ad revenue expected to decline by 10.8% to $1.21 billion. As a result, its share of the US digital ad market will drop to 1.5%, down from 1.9% in 2016. Mobile ad revenue will also decline, falling 10.3% to $1.08 billion and reducing Twitter’s US mobile ad market share to 1.8%. These declines highlight Twitter’s ongoing struggle to compete with more prominent players in the digital ad space.

A Duopoly Strengthens

As Google and Facebook expand their dominance in the US digital ad market, they continue to outpace competitors with their best-in-class targeting capabilities and mobile ad innovations. While Snapchat shows promise with its creative ad products and youthful audience, and Instagram further strengthens Facebook’s position, Twitter struggles to maintain its relevance. The digital ad duopoly’s ability to adapt to advertiser demands ensures its ongoing leadership in the ever-evolving digital advertising ecosystem.