It’s been the status quo for years, the Google-Facebook duopoly in the field of online advertising, with marketers investing their hard-earned ad dollars primarily there. Not necessarily the case for the future, though. Emerging signs of turbulence and new players are challenging the established ecosystem. Intrigued? Check out our selection of highlights from recent analyses on the subject:
- Ad investment in the duopoly appears to be slowing. As shared in a recent Digiday article, according to Nick Waters, CEO of media management firm Ebiquity, there’s a growing realization amongst the marketing community that the effectiveness of these channels doesn’t necessarily warrant the spend. For clarity, the article implies that Google and Facebook are still quite stable. Ad dollars continue to pour into them. They do so, however, more slowly than ever. The reason? Complaints over inflated audiences, issues with measurement and more recently, political complications are making the platforms, once impervious to recessions, shady business practices, even privacy regulations, increasingly vulnerable – especially to regulators and newer rivals.
- Oversold, not always accurate, declining in effectiveness. Not every advertiser is willing to accept it yet, but it’s becoming harder to dispute the fact that these platforms have been oversold, according to Waters. Advertising on Facebook, especially from its app, just isn’t as accurate as it once was — or to be more specific, ever since Apple throttled the data that made it accurate. Without it, it’s difficult for any marketer to make a strong business case for advertising there as much as they once did. The growing number of competitors like TikTok or Amazon, Microsoft or Apple divert the ad money that would otherwise end in Facebook, and this trend is only going to become more frequent.
- Vulnerable to the changing rules of engagement. For the first time, the rules of engagement aren’t being set by the duopoly and the conditions suit their rivals. Waters is getting the sense from marketers, who as much as they continue to spend money on Instagram or YouTube, are clearly keeping a keen eye on the emergence of TikTok. That said, YouTube as a video streaming site seems safe for now, despite the short-form video app’s success. Some ad dollars are starting to move out of these platforms and into streaming services and other media with more innovative forms of advertising.
- Big or small, brands are cautious in their ad spend. CMOs of big advertisers seem to threaten to pull money from the big platforms every couple of years. This time, though, Waters adds, it’s not just big brands that are apprehensive about putting more dollars into Google or Facebook. It’s the smaller ones — the ones that account for the bulk of cash spent on those ads. Moreover, there are a lot more reasons for marketers to make those calls now. Both platforms face a weak economy and new rivals but Facebook in particular, with its rapidly declining audience and numerous examples of privacy concerns and compliance issues, is particularly susceptible to fresh and promising new players.
- Amid the economic uncertainty. Recently, a trio of Alphabet (Google’s parent company) executives sounded caution on a call with investment analysts, using “uncertain” or “uncertainty” at least 13 times to describe the economy. Still, Google, the world’s biggest seller of online advertising, is poised to withstand a global recession better than smaller rivals. The second-quarter sales from the company’s biggest moneymaker – Google search – actually topped expectations, making investors blow a sigh of relief. Alphabet executives said Google was not immune to the pullback, which has been brought on by clients facing product shortages, less demand and a variety of other factors, among which also the suspended sales in Russia due to the war in Ukraine. But Google has weathered storms better than social media companies. It brings in revenue through a greater variety of functions in the ad market, and search ads can be less expensive for customers to generate since they often include just text.
As Nick Waters puts it, in fairness, this is very much the beginning of the start, not the apex, of a potential problem for Google and Facebook. Although both platforms are still robust, a lot will depend on how ad dollars hold up against what continues to be a volatile and very dysfunctional economy. As a forward-thinking marketer though, wouldn’t you rather consider also other viable alternatives, in order to diversify your ad spend? Novelty Media, via SmartAdd, is an innovative media channel endorsed by Mobile Operators, which changes the game in a multi-billion-dollar market, once occupied solely by the behemoths. We enable the display of snackable, short-form video and static content on the smartphone screen in a new and impactful way, thus building an unprecedented visual trading currency into the content delivery landscape. Keep following our Marketing Bites to learn more about our technology implementations and marketing frameworks.