The traditional dominance of Google and Facebook in digital advertising is facing a growing challenge from Amazon.com Inc., TikTok and streaming services, new research says.
In 2022, Alphabet Inc.’s GOOGL,
Meta declined to comment on the research, but during the conference call to discuss the company’s third-quarter earnings, CEO Mark Zuckerberg described ads as a top investment priority. Meta is also scaling monetization of its Reels format across both Instagram and Facebook, with the combined run rate across both apps now $3 billion, according to Zuckerberg. He also described the company’s click-to-message ads as one of Meta’s fastest-growing ad products, with a $9 billion annual run rate.
Additionally, Meta recently started testing three new advertising types for Instagram, along with two new advertising types on Facebook focused on the Reels video format.
Now read: Amazon shares surge on Q2 sales beat as analysts highlight the strength of AWS, Prime and advertising
MarketWatch has reached out to Google with a request for comment on this story.
Insider Intelligence’s data indicates that Google’s and Facebook’s ad businesses are still growing, but at a slower pace than the rest of the U.S. digital-advertising market
E-commerce giant Amazon AMZN,
Even in an uncertain macro environment, Amazon’s advertising business has been cited as one of the company’s key strengths by analysts. Amazon’s stock was down 0.2% on Wednesday.
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TikTok’s share of digital-ad spending is still relatively small, accounting for an estimated 2% of digital-ad dollars in 2022, according to Insider Intelligence, a figure that is predicted to grow to 2.8% by 2024.
The e-commerce space is evolving rapidly as companies adapt to new consumer trends. Amazon, for example, has reportedly launched a TikTok-style feed of customized videos and photos, which e-commerce experts have cited as a smart move.
The rise of TikTok, which is owned by Chinese company ByteDance Inc., has prompted companies such as Amazon, Meta and Alphabet to ramp up their own short-form video efforts.
See now: So you want to make money selling things on TikTok? Do this, internal memos say.
Alphabet’s stock fell 0.8% on Wednesday, while Meta’s rose 2.6%, outpacing the S&P 500’s SPX,