Google and Facebook, which currently account for around 58.5 percent of total U.S. advertising spend, are projected to lose share on advertising spend in the U.S. in 2018.
According to a report from eMarketer, both Google’s and Facebook’s advertising revenue will increase in absolute terms however both with lose advertising share to platforms like Snapchat and Amazon.
The report states that Facebook’s annual advertising revenue will increase by 16.9 percent year-on-year to $21 billion in 2018, however its total share of U.S. advertising revenue will drop to 19.6 percent, from 19.9 percent in 2017.
While such an increase would represent a loss in share of total advertising, it also represents an increase in absolute terms of $3 billion year-on-year.
In its Q4 earnings report for 2017, Facebook highlighted its first ever decline in U.S. users. While total daily active users (DAUs) increase quarter-on-quarter, total DAUs in the U.S. and Canada declined by 700,000.
This was the first time the Silicon Valley based social network posted a quarter-on-quarter decline in DAUs in the U.S. and Canada.
Moreover, Facebook has been struggling to deal with intense public scrutiny from publishers and public officials following allegations it facilitated Russian interference in the U.S. election in 2016.
Google’s total share of advertising revenue is projected to decline from 38.6 percent in 2017 to 37.2 percent in 2018. Like Facebook however, its revenue from advertising is projected to increase in absolute terms to $39.92 billion, which represents a 14.5 percent increase on figures from 2017.
A number of changes have been instituted across Google’s network of platforms over the course of the last year, and particularly in relation to the manner it serves advertisements and delivers content.
YouTube, a Google-owned property, has announced it will add public disclaimers on all video content published by organizations which are funded by Governmental sources.
It has also revealed it will started adding content from Wikipedia to conspiracy-related YouTube videos, a move which the Wikimedia Foundation was apparently unaware of.
After endless complaints about intrusive advertising, the search giant also introduced ad blocking functionality to the latest release of its Chrome browser and it is also a co-founding member of The Coalition for Better Ads.
The decline in total advertising share for both Facebook and Google can partly be attributed to intense public scrutiny; however it can also be attributed to the rise of alternative platforms like Amazon and Snapchat.
Despite having failed to post a profit to date, Snapchat’s share of total advertising revenue is expected to increase by 81.7 percent in 2018 and will surpass $1 billion for the first time.
Likewise, Amazon’s advertising revenue is projected to grow by 63.5 percent in 2018 and surpass $2 billion for the first time.