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Meta and Alphabet lose dominance over US digital ads market

Meta and Alphabet lose dominance over US digital ads market

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Meta and Alphabet have lost their dominance over the digital advertising market they have ruled for years, as the duopoly is hit by fast-growing competition from rivals Amazon, TikTok, Microsoft and Apple.

The share of US ad revenues held by Facebook’s parent Meta and Google owner Alphabet is projected to fall by 2.5 percentage points to 48.4 percent this year, the first time the two groups will not hold a majority share of the market since 2014, according to research group Insider Intelligence.

This will mark the fifth consecutive annual decline for the duopoly, whose share of the market has fallen from a peak of 54.7 percent in 2017 and is forecast to decline to 43.9 percent by 2024. Worldwide, Meta and Alphabet’s share declined 1 percentage point to 49.5 percent this year.

Jerry Dischler, head of ads at Google, told the Financial Times that fierce rivalry from new entrants reflects an “extremely dynamic ad market.”

Regulators in the US and Europe have added antitrust scrutiny such as pursuing Google for allegedly promoting its products over rivals.

In December, Facebook owner Meta was served with a complaint from the EU’s watchdogs over concerns that the social network’s classified advert service is unfair to rivals. Tech groups are fighting harder than ever for a share of the $300 billion digital ads market, even as companies worldwide are cutting their ad budgets in response to rising interest rates and high inflation.

Amazon and Apple have expanded their advertising teams. In July, Netflix announced it would partner with Microsoft to build an advertisement-supported tier of its streaming service.

Meta chief executive Mark Zuckerberg has blamed recent revenue falls on Apple’s privacy changes that make it harder to track users and target advertising, as well as the growing popularity of viral videos app TikTok, owned by Chinese parent ByteDance.

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