{"id":604621,"date":"2023-02-03T06:33:00","date_gmt":"2023-02-03T12:33:00","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/02\/03\/google-meta-duopoly-continues-to-creak-in-their-heightened-maturity-as-amazon-apple-ascend\/"},"modified":"2023-02-03T06:33:00","modified_gmt":"2023-02-03T12:33:00","slug":"google-meta-duopoly-continues-to-creak-in-their-heightened-maturity-as-amazon-apple-ascend","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/02\/03\/google-meta-duopoly-continues-to-creak-in-their-heightened-maturity-as-amazon-apple-ascend\/","title":{"rendered":"Google-Meta duopoly continues to creak in their \u2018heightened maturity\u2019 as Amazon, Apple ascend"},"content":{"rendered":"

Momentum among the platforms is shifting from Google and Meta to Amazon and Apple. Want proof? Check out the latest earnings update.\u00a0<\/p>\n

Google\u2019s total ad revenues were down for the second time in the company\u2019s history \u2014 and it wasn\u2019t just down to YouTube\u2019s well-documented issues<\/a>. Its search ad revenue, which is normally immune to downturn-included spending cuts, also declined.\u00a0<\/p>\n

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The same goes for Meta. It posted its first annual revenue loss in ad revenue.\u00a0<\/p>\n

Amazon and Apple, on the other hand, continue to aggressively rake in ad dollars \u2014 albeit into much smaller pots compared to Google and Meta.\u00a0<\/p>\n

The reason for this stark difference in fortunes? More like reasons \u2014 some structural, others economic. Bottom line: The unfair advantages that helped propel Amazon and Apple further into advertising are starting to manifest as real leverage for both businesses.\u00a0<\/p>\n

How fast they lean on this leverage remains to be seen. Whatever happens, it won\u2019t be a complete overhaul of the status quo. Google and Meta have too much influence over ad dollars for that.\u00a0<\/p>\n

Even so, it\u2019s clear that this influence is waning. It was doing so throughout last year when ad revenue was growing albeit slowly. The latest quarter did little to change this narrative. If anything, it sealed it.\u00a0<\/p>\n

Facebook\u2019s earnings are a case in point. Its ad revenue growth was actually up 2% in constant currency terms over the fourth quarter, which sounds a lot better than the widely-reported 4% decline. And yet, it doesn\u2019t change the fact that this is a slow-growth ads business now. Look at how fast it was growing during the pandemic, for instance. In the final quarter of 2020, ad revenue was up 31% on a constant currency basis.<\/p>\n

The same goes for Google. Clearly, things are bad there when search ad revenue is down. It slumped 1.6% to $42.6 billion over the holiday season. Ad spending on YouTube continued to contract over the same period with ad revenue totaling at $7.9 billion, down 7.8% from $8.6 billion a year earlier.\u00a0<\/p>\n

In contrast, Amazon and Apple\u2019s numbers were a lot more positive.<\/p>\n

Amazon scooped up ad revenues of $11.6 billion in the fourth quarter, up 23% compared to the year prior. It\u2019s the sort of high growth that can only happen in an ad slowdown to a business that has Amazon\u2019s ability to supply advertisers with the most up-to-date intent signals possible.<\/p>\n

Meanwhile, Apple\u2019s services division, the part of the company that houses its ads business, made so much money over the final three months of 2022 that it set a new record of $20.8 billion. This was a double digit increase on a constant currency basis compared to the same period in 2021 when it rose 24%, said the company\u2019s CFO Luca Maestri.\u00a0<\/p>\n

Needless to say, the shadow both Apple and Amazon have cast over ad dollars is getting longer by the quarter.\u00a0<\/p>\n

No, this doesn\u2019t mean they will have ads businesses as big as Google or Meta anytime soon \u2014 at least not in sheer dollar value. Rather, it\u2019s the growing influence of Amazon and Apple\u2019s respective ads businesses that defines their net worth. Whether it\u2019s Amazon integrating its ads business more closely to its cloud technologies or Apple making it harder for rival companies to offer effective advertising, these companies are having an outsized impact on the market relative to the size of their ads business.\u00a0<\/p>\n

\u201cGoogle and Meta aren\u2019t going away but there is going to be a realignment in terms of spending of dollars out of those businesses into younger ads businesses,\u201d said Paul Verna, principal analyst at the advertising and media practice at Insider Intelligence. \u201cThe ad market overall is going to become more diverse across more players with smaller-sized businesses to the traditional duopoly of Google and Meta.\u201d\u00a0<\/p>\n

To be fair, all momentum stories end \u2014 even one as relentless as the Google-Facebook duopoly. It\u2019s the abruptness at which this slowdown has happened that\u2019s surprising. There are a few reasons for this, but none are as fundamental as the fact that these companies got nudged toward inflection points in their ads businesses faster than anticipated.\u00a0<\/p>\n

YouTube dominated CTV dollars and had a place in the cultural zeitgeist that was unrivaled. Both changed once streaming services realized they needed ad dollars and TikTok popularized short-form video.\u00a0<\/p>\n

Meta, on the other hand, underestimated Apple. It knew the tech company would punch a hole in its business when it made it harder for the platform to show marketers how well their ads performed, but arguably underestimated how big a hole it would be. Two years on and the company still hasn\u2019t recovered from the gut punch.\u00a0<\/p>\n

\u201cWe\u2019re seeing the engines of digital advertising that powered the scaled web 2.0 businesses, from video platforms to social networks reach heightened maturity,\u201d said IAB Europe chief economist Daniel Knapp. \u201cThose businesses aren\u2019t outperforming digital ad growth anymore.\u201d<\/p>\n

The subtext being that a duopoly that seemed unassailable isn\u2019t. Gone are the days when Google and Meta were immune to the trials of other media. They can\u2019t shrug off blips in the broader economy like they used to because there are so many companies pouring a large amount of their ad dollars into those businesses. In a pinch those same advertisers are going to need to cut those investments to save money. The bloom is off for the duopoly as the competition moves in.<\/p>\n

Not that the top brass at Google and Meta believe this. On the contrary, they\u2019re already trying to jumpstart their stuttering ads businesses. In the short-term to medium-term those efforts are predicated on artificial intelligence. It\u2019s going to be, according to platform bosses, to build more privacy-centric ad tech.\u00a0<\/p>\n

\u201cIn our broader ads business, we\u2019re continuing to invest in AI and we\u2019re seeing our efforts pay off here,\u201d said Mark Zuckerbeg, CEO of Meta. \u201cIn the last quarter, advertisers saw over 20% more conversions than in the year before. And combined with a declining cost per acquisition, this has resulted in higher returns on ad spend.<\/p>\n<\/div>\n

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