Are Google’s And Facebook’s Digital Ad Dominance In Danger?


Ultimately, the answer to the question I’ve posed in this headline is: No. The adtech supremacy of these two companies (and increasingly AmazonOpens a new window ) will likely last for a while.

That said, however, the digital advertising sector will soon experience significant changes, and the transition could impact the relationships between these major players and the publishers that pay for their ad space.

Meanwhile, digital media publishers are striking up their own partnerships and testing new tactics to help them better compete with these online ad sales platforms gobbling up the majority of marketers’ ad dollars.

All to say that although their standing as the top digital ad sellers probably won’t suffer near-term, Facebook and Google eventually may be forced to change how they influence and control the market.

Regulatory pressures

We all know that there’s a duopoly in the Adtech sector — which, as I mentioned already, is gradually becoming a triopoly as Amazon continues to boost its presence in the digital advertising world.

Facebook and Google had a 60% combined market share of the digital marketing space last year, according to eMarketer, while these two companies are also responsible for as much as 90% of the ad industry’s annual growth, reports advertising trade group Digital Content NextOpens a new window .

The dominance of these three companies relies on the vast amounts of consumer data their platforms can offer marketers. The ability to analyze millions (if not billions) of customers’ website interactions at a granular level gives these firms a substantial advantage over their competition: They can build the most in-depth consumer profiles imaginable, covering everything about how, what and why people shop online.

And while this data-driven focus hast undoubtedly contributed to Facebook and Google’s ascendancy, as I wrote in a previous articleOpens a new window , it also has allowed them to tighten their grip on the industry. Indeed, marketers looking for the best consumer data and actionable insights for their campaigns have little choice but to invest in these platforms.

The growing need for consumer data, coupled with the tech conglomerates’ massive data collections, has helped them convert their advertising platforms into walled gardens: closed software ecosystems in which the operator controls all capabilities and operations.

It seems, though, that they may be forced to tear those walls down, at least partially.

As HuffPost editor-in-chief Lydia Polgreen argues: “The platforms are finally recognizing the massive role they play in our ecosystem and that pretending that they are neutral distribution channels just doesn’t wash with regulators or with the public either.”

From the regulatory side, two groups of US states attorney recently announced antitrust investigations into Facebook and Google, which, as Lukas I. Alpert writes for the Wall Street Journal, “further [pressures] tech giants already under federal scrutiny over whether their online dominance stifles competition.”

Similarly, Congress has launched an antitrust probe into the two, as well as Apple and Amazon.

As Alpert explainsOpens a new window , Google and Facebook have even implemented changes to their platforms that have been pursued by publishers and media outlets for years. Moves that he points out, “some in the media industry see as an effort to pre-empt potential regulatory backlash.”

Data safety issues

While there’s mounting strain on Google and Facebook on the industry side, there’s also been a fair amount of public outrage following a variety of data privacy and data safety screw-upsOpens a new window .

Facebook took an embarrassing $5 billion fine imposed by the Federal Trade Commission for privacy violations (read: Cambridge Analytica scandal).

Suddenly, the stress on these ‘untouchable’ advertising empires is coming from all sides, and the cracks are showing.

Regulators and the public increasingly are pushing for more oversight on these tech giants. (Democrats, especially, pushed for tougher supervision on Facebook during FTC deliberations regarding the company’s privacy breaches.

Blood in the water?

As the adtech environment shifts, smaller publishers are making moves to take ad dollars off the incumbents.

For instance, three leading digital publishers have teamed upOpens a new window to take on Alphabet-owned YouTube.

BuzzFeed, Group Nine Media and Insider Inc. are forming an ad sales alliance to co-sell video ads across all of their websites, apps and YouTube channels.

Their move is intended to create a unified ad option for video ad space that could compete for YouTube, which has suffered a litany of brand safety problemsOpens a new window in recent years. As I wrote in February, ads have been placed without the buyers’ knowledge alongside “videos promoting pedophilia or politically extremist-produced content such as white supremacy, Nazi ideologies and terrorism.”

Whether the growing number of data security-related outcries, increased regulatory pressures or competitor alliances will actually threaten Google and Facebook’s digital advertising hegemony, who knows.

What’s for sure is that soon, the digital ad sales landscape is headed for change. So marketers, stay tuned.