Google And Facebook Still On Top Of The Online Food Chain

A new study commissioned by cloud computing giant Salesforce shows that Google and Facebook continue to dominate the world of digital advertising, and are adapting as more and more marketers and advertisers turn to video.

According to Salesforce’s Digital Advertising 2020 Report, which the company officially unveiled on Thursday morning, 65% of companies increased their video advertising budgets over the past year. And 52% of advertisers are choosing to produce their video ads in-house.

Google And Facebook Conquers All

While video ad spend increases, Google and Facebook continue to dominate the overall digital ad spend landscape, with Salesforce estimating that over the next year, those two companies (and their subsidiaries Instagram and YouTube) will account for 66% of all digital advertising spend worldwide.

These same companies are also capturing the value of video.

While Salesforce estimates that display ads, which it says account for 15% of the market, will decline over the next year to 14% of the market, YouTube, which currently accounts for 15% of the market, will rise to 16% of the market.

In other words, as display ads decline in favour of video, Google is positioned to pick up those pieces.

The Salesforce report also found digital advertising and marketing are continuing to converge, with a majority of companies now using the same teams and budgets for both purposes.

Brands are also overwhelmingly turning to data management platforms (DMPs) to manage the scale of their data, while figuring out the most effective way to share that data with partners.

And, while companies are still using traditional digital metrics like impressions, most are also beginning to use advanced metrics that allow for more sophisticated and long-term tracking.

Salesforce also predicted that artificial intelligence will become more prominent in advertising, driven in part by voice assistants like Amazon’s Alexa and Google Home.

Almost three quarters of advertisers surveyed already advertise through voice assistants, or are planning to some time over the next year.

Digital Advertising On The Rise

Google and Facebook together dominate digital advertising, with about 63 percent between the two of them in 2017, according to eMarketer.

This year, the firm predicts Google will make $40.08 billion in U.S. digital ad revenue, while Facebook is poised to bring in $21.57 billion.

Though YouTube is still the preferred digital video platform to advertise on, Facebook is encroaching on its top position.

In particular, 41 percent of the survey takers considered Facebook video the best place to launch a new ad campaign over TV (25 percent) and YouTube (10 percent).

While the digital ad market is expected to have a compound annual growth rate of 13 percent between 2018 and 2023, Google is only expected to increase 11 percent.

There was also increasing interest in advertising on Snapchat-like service Instagram Stories, with ad buyers saying they preferred Instagram Stories over Snapchat.

Both Facebook and Google shares are expected to outperform, with Facebook’s price target at $220 and Alphabet’s at $1,230.

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Ian Leishman

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