Good news for Amazon. Bad news for Google. According to a new report from eMarketer, Amazon’s share of online advertising continues an upward trend. Google, by contrast, continues to lose marketshare. Read on to learn more.
Amazon’s share of online advertising, which has been rising every year, will reach 9.5 percent in 2020, eMarketer says. Google’s share will drop to 29.4 percent, as Google reports its first-ever decline in advertising revenue since eMarketer began tracking advertising revenue in 2008. Meanwhile, Facebook’s share of online advertising is predicted to rise to 23.4 percent (note, however, that eMarketer published its analysis before an advertising boycott of Facebook took hold—those numbers will likely be re-evaluated).
Why is Amazon Advertising increasing its share, while Google sees its marketshare drop?
- Amazon’s advertising unit, known as Amazon Advertising, is probably benefitting from people shifting their purchasing online during the COVID-19 lockdown of 2020. As we have blogged, Amazon without question became an especially attractive place to make purchases as shelter-in-place mandates took hold. And Amazon was prepared to help advertisers build their visibility during this surge, with a tool kit including products such as Sponsored Ads and Display Ads.
- Meanwhile, eMarketer principal analyst at Insider Intelligence, Nicole Perrin, explains that “Google’s net US ad revenues will decline this year primarily because of a sharp pullback in travel advertiser spending, which in the past has been heavily concentrated on Google’s search ad products. Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry.”
What the News Means
The news creates some nice press for Amazon Advertising, but as we have blogged, Google’s ad business remains healthy and solid. And as eMarketer points out, Google is being hit by the economic downturn in travel. There is nothing inherently wrong with Google’s ad products, however.
In fact, Google continues to make its ad products better. We have blogged about some of its innovations lately:
- Shopping campaigns with partners makes it easier for nonretailers such as manufacturers to sell their own products online.
- Location-based digital advertising tools help strengthen Google’s advertising services at the local level.
- Google, like Amazon, is injecting more personality into content related to its voice-based products. Earlier this year, an emotionally powerful ad for Google Assistant rang especially true, perhaps because it was based on the experiences of the grandfather of a Google employee.
Facebook likely has more to worry about than Google. An advertising boycott is gaining traction with big brands such as Unilever and Starbucks pulling their ad business because they believe Facebook is not doing enough to police hate speech, among other grievances. As reported by cnbc.com, the big names already responding to the #StopHateForProfit campaign have the potential to influence more companies to join the boycott.
We suggest that regardless of your platform of choice, businesses continue advertising online. Despite the turbulence among the big online ad players, we know that businesses that continue to have an online ad presence are best positioned for success.
Do you need help sorting your digital ad presence? Contact True Interactive. We can help.