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Google ad revenues to dip as market becomes 'triopoly': Tracker
Google's net US digital ad revenues will drop 5.3 percent to US$39.58 billion to bring its market share down to 29.4 percent, according to the eMarketer forecast.
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Attendees visit the Google booth at the 2019 GDC Game Developers Conference on March 20, 2019 in San Francisco, California. Google is expected to see its first decline in United States ad revenues this year as the coronavirus pandemic hits travel advertising, a market tracker said Monday. (AFP/Justin Sullivan)
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oogle is expected to see its first decline in United States 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 digital advertising but with a smaller share as the market evolves into a "triopoly" with Facebook and Amazon.
Google's net US digital ad revenues will drop 5.3 percent to US$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 market share in the US," Perrin said.
