Google’s share of digital ad revenue will keep shrinking: research firm

Google’s share of U.S. digital advertising revenue will continue to shrink, market research firm eMarketer’s latest numbers predict.

The projected declines in market share span both search-ad income, for which Google competes mainly against Microsoft and Yahoo, and display-ad income, for which the firm competes mainly against Facebook, Twitter, Yahoo and Verizon.

Google remains the powerhouse in search, and will reap 73.4 percent of the $30 billion in U.S. search-ad spending, according to eMarketer. However, last year Google took 74.5 percent of search-ad spending. And next year, the company’s share will drop to 71.5 percent, and to 68 percent in 2018, eMarketer expects.

As Google’s proportion of search-ad revenue declines through 2018, Yahoo will also slip, from 3.7 percent this year to 3.2 percent by 2018, and Microsoft will take 8.8 percent this year, 8.9 percent next year, then 8.6 percent in 2018, according to eMarketer. Yelp will see steady gains from 1.9 percent this year to 2.3 percent in 2018, the research company predicts.

On display ads, which will bring in $33 billion across the U.S. this year, Facebook’s revenue share will keep up its fairly steep rise, while Google’s portion will slide, eMarketer forecasts. Facebook, which saw its share in 2014 of 25.1 percent hit nearly 30 percent in 2015, will boost its portion this year to 31.2 percent, and to 34.7 percent by 2018, according to eMarketer. Google’s share will drop from 14 percent this year to 12.9 percent in 2018, eMarketer expects.

Twitter’s take, which has been on the increase from 3.9 percent in 2014 to 4.8 percent last year, will bring in 5 percent of the total this year and 5.6 percent by 2018, eMarketer predicts. Yahoo’s share, 5.8 percent in 2014, has fallen consistently and will continue its slide, to 3.7 percent this year and 3 percent in 2018, according to eMarketer.

Verizon, which is in the process of buying Yahoo, has also seen steady declines in display-ad share, from 4.4 percent in 2014 to 3.7 percent last year, and its portion will drop to 2.7 percent by 2018, eMarketer forecasts.

Still, Google will continue to increase actual revenue from both search and display ads, eMarketer says. This year’s $22 billion in search-ad revenue for Google will rise steeply to $23.7 billion next year and $25.4 billion in 2018, eMarketer predicts. Google’s display-ad revenue will climb from this year’s $4.6 billion to $5 billion next year and $5.5 billion in 2018, according to the research firm.

Globally, Google has seen its share of search- and display-ad revenue contracting as well. In search, the firm saw its portion drop to 58.9 percent last year from 60.8 percent in 2014, and this year will take 55.2 percent, eMarketer expects. Chinese web-services company Baidu will increase its search-ad share this year to 10.1 percent, after two years of growth from 2014’s 8.5 percent; Microsoft took 3 percent in 2014 but will have 3.4 percent this year, according to eMarketer.

In display, Google’s global portion will drop to 12.3 percent this year from 13.3 percent last year and 14.1 percent in 2014, eMarketer predicts. Facebook will increase its dominance this year, to 26.9 percent from last year’s 25.1 percent and 21 percent in 2014, according to eMarketer. Chinese e-commerce company Alibaba will take 10.6 percent this year, after steady increases from 8.8 percent in 2014, eMarketer predicts.

Twitter will take 3.1 percent of global display ad revenue this year, up from 2.9 percent last year and 2.3 percent in 2014, according to eMarketer.

 

Photo: Two men walk past a building on the Google campus in Mountain View (AP/Jeff Chiu)

 

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