Facebook and Google Dominate Digital Ad Market

This week, the Interactive Advertising Bureau—a New York-based organization responsible for establishing digital advertising standards—announced that digital ad revenues have grown 19 percent over last year, hitting a record of over $32 billion. That means more money than ever before is being spent on digital advertising—but where is it going?

Here’s a closer look, straight from the IAB:

• Mobile revenue saw the largest year-over-year change, climbing to $15.5 billion, up 89 percent from $8.2 billion in HY 2015, representing 47 percent of total internet advertising revenue
• Taking a deeper dive into mobile, video on smartphones and tablets saw strong triple-digit growth, reaching $1.6 billion in HY 2016, an impressive 178 percent rise from HY 2015
• Mobile search took a significant uptick, realizing $7.4 billion in HY 2016, a 105 percent increase compared to $3.6 billion in HY 2015
• Total digital video, including mobile and desktop, rose to $3.9 billion in HY 2016, up 51 percent from $2.6 billion in HY 2015
• Total search, including mobile and desktop, accounts for half of all internet ad revenue, and hit $16.3 billion in HY 2016, a 19 percent hike over the $13.7 billion generated in HY 2015
• Total social media revenues, including mobile and desktop, surged to $7 billion in HY 2016, a 57 percent rise compared to $4.4 billion in HY 2015
• Of the sector verticals measured, the top three continue to amass nearly half of all ad spend (46 percent)—retail (21 percent), financial services (13 percent), and automotive (12 percent)

On the surface, the story is simple: mobile ads and video ads are growing to dominate the digital ad industry; however, a deeper dive into that spending reveals that Google and Facebook are responsible for all of the growth.

Wow! If you exclude Facebook and Google, digital ad spending is actually shrinking. https://t.co/lC4hd9AwzW

— Jack Marshall (@JackMarshall) November 1, 2016

What does that mean for you?

Unless you’re working for a competing digital advertising source, the news means you need to continue to be proficient at the game Google and Facebook are playing. It means you need to brush up on Facebook’s plethora of advertising options—especially if you’re a small business owner. The same goes for Google.

Industry veterans in the digital marketing realm may point to the Silicon Valley titans’ dominance as a weakness of the industry. Diversity, after all, benefits the masses more than near-monopolies. But you’re not on the front lines of that battle—you’re battling for sales and recognition in the tackle world. And, at least for now, mobile and video ads via Facebook and Google remain the dominant options for generating a buzz around your business online.