The Google and Facebook Advertising Duopoly

The Google and Facebook Advertising Duopoly
August 8, 2017 Syed Ariz Hussain

The Google and Facebook Advertising Duopoly

Alphabet, the parent company of Google, revealed its quarterly earnings on the 24th of July, 2017 for the quarter which ended on 30th July, 2017. Alphabet announced that its quarterly earnings equated to $26 billion dollars, which was a 21 percent jump from last year.

Additionally, Facebook also unveiled its quarterly earnings which amounted to $9.3 billion dollars, a staggering 45 percent increase over their earnings in the previous year. The bulk of this revenue for both companies came from their advertising efforts and these earnings establish an advertising duopoly; which essentially means Google and Facebook are the two most recognized and profitable platforms for advertising by a long shot. With the two taking the majority of the advertising claims for themselves while leaving the scraps for other advertising tech companies; which have almost zero hope of prospering at this point.

So how exactly have Google and Facebook rose to such a position of power that they have begun to overshadow any and all forms of competition? It is because of the excessive, yet well-deserved, trust that marketers have placed in the two, as their potential to reach billions of people cannot be overstated.

Additionally, Google and Facebook possess the Holy Grail when it comes to consumer data and they protect this treasure vigorously as it is the key to keeping them on top of their competition, as it allows them the luxury of highly targeted marketing.

However, some see the ever-increasing dominance of the Google and Facebook duopoly as a threat to the concept of an “open internet” as Google has already begun favouring its own shopping service in search engine results while dropping competitor rankings in doing so. Although, European Union antitrust regulators have billed Google a whopping $2.7 billion in fines, with an additional two investigations currently being conducted; the future of various other advertising tech companies looks bleak.

The New Horizon

Google and Facebook have managed to lock down most forms of content as part of their impressive repertoire. And now they have turned their attention towards a new horizon: Video. With more and more people every day wanting some form of instantaneous gratification, and the eventual slowdown of advertising revenue (because Google and Facebook are running out of places to advertise); The duopoly is paying increasingly greater attention to video, over traditional forms of content in the form of blog posts and articles, although these forms are not completely outdated; engagement levels are higher with video, which means that people tend to spend more time with them, and therefore video is seen as more valuable for making advertiser revenue.

Because of this, Facebook has already signed numerous deals with various news and entertainment companies and creators i.e. Vox Media, BuzzFeed, ATTN, Group Nine Media and others to make shows for its upcoming video service, which has been reported to feature long-form content, which Facebook will own proprietary rights to and short-form content, which will be owned by the creators of the content themselves.

With this step forward, Facebook aims to rival the Google-owned subsidiary, YouTube, and challenge its domination as the leading video watching platform as it has almost 5 billion videos watched every day, and the total number of hours watched on YouTube each month equalling 3.25 billion hours (source: https://fortunelords.com/youtube-statistics/). However, Facebook is looking to change this by pushing for greater video support by aligning itself with multiple news and entertainment companies, although this may not help it dethrone YouTube as the best place to watch videos. Though it will definitely not let this uncertainty slow it down, as Facebook has a knack for relentlessness which is evident as it constantly tried to acquire Snapchat, and on failing to do so, creating a platform on the Facebook app with functionality that mirrored Snapchat.

With Facebook slowly expanding into video, we may begin to see numerous other video-sharing websites such as DailyMotion, Vimeo, and Twitch fly under the radar more than usual, as the nearly 2 billion monthly Facebook users dwarf other audiences of these sites by an extraordinary margin, until only YouTube and Facebook remain, which reaffirms the idea of a duopoly of both of these massive companies.

The Growing Competition: 

Gone are the days when Amazon would be regarded as just an online store, or Apple as just a manufacturer of mobile phones. These companies are now trying to put their best foot forward, in the hopes of supplanting Google and Facebook from their established positions.

When Amazon launched, it was simply a place to buy books in a convenient and cost-efficient way.  They soon diversified into music, movies, and even groceries all the while attempting to maintain the same customer satisfaction and user experience.

Amazon, with its own advertising platform and search assistant (Alexa), can pose as competition to the Facebook-Google duopoly alongside Apple’s already established virtual assistant Siri, which rivals that of Google and Windows. Moreover, Apple has been rumoured to be incorporating augmented reality tech into its upcoming flagship phone, the iPhone 8, which will probably give the device a big leg up in front of the competition. As such, we can expect big things from these corporate giants, maybe not big enough to overtake Google and Facebook though.

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