Can Amazon Chip Away at Google and Facebook’s Digital Ad Dominance?

eMarketer report highlights threats to the duopoly

Amazon will take in $2.89 billion in ad revenue in the U.S. this year, according to eMarketer. Getty Images

Data aggregator eMarketer today released a report indicating Google and Facebook’s (aka ‘the duopoly’) dominance of the digital ad market is about to be less dominant, as “smaller players” like Amazon and Snapchat are on the rise.

In a blog post, eMarketer “estimates the two companies [Facebook and Google] will capture a combined 56.8 percent of US digital ad investment in 2018, down from 58.5 percent last year” because of those pesky multibillion-dollar upstarts, Amazon and Snapchat.

According to The Wall Street Journal, “Google and Facebook are still increasing their total ad revenue significantly, and no other competitor even cracks 5 percent market share.”

The eMarketer report highlights how Amazon is starting to make headway into the digital ad marketplace; eMarketer projects it will take in $2.89 billion in ad revenue in the U.S. this year, up 63.5 percent.

According to eMarketer, Amazon will have a 2.7 percent share of the country’s digital ad market, and by 2020, that share will grow to 4.5 percent.

“Amazon finds itself in fifth place among the top digital ad sellers in the U.S., and it’s on track to be No. 3 by 2020—surpassing both Oath and Microsoft,” Monica Peart, eMarketer’s senior forecasting director wrote in the blog post. “So far, it’s been conservative in its ad load. It remains an open question as to when Amazon will take advantage of its significant reach and dominance in rich shopper data to ramp up the placement of ads in other areas.”

Let’s check back on this in the future. eMarketer often revises its forecasts. To wit, from The Wall Street Journal: “EMarketer’s estimate for Google and Facebook’s combined share of the market in 2017 was revised down to 58.5 percent from a forecast in September of about 63 percent, because the overall market grew more than projected to $90.4 billion last year.”

“In the same September forecast, eMarketer predicted both companies would achieve a slight uptick in total market share in 2018,” the Journal report continued. “But the firm has since adjusted its estimates to account for other digital companies experiencing ‘faster-than-expected growth,’ according to the report.”

One thing is clear, however. As Amazon begins to ramp up its advertising offerings, it’s not a big leap to say it will no longer be a third wheel.

In the bigger data picture, Amazon is already king. Google knows what you’re curious about; Facebook knows what you’re interested in; Amazon knows what you’ve bought. And while Google and Facebook have made billions from ad revenue against data from their core functionalities—search and social, respectively—Amazon’s ability to match purchase behavior with brands’ ads is a compelling story.

At least until the next data breach.

@joshsternberg Josh Sternberg is the former media and tech editor at Adweek.