A landscape once dominated by Meta (META) and Google (GOOG) is now changing. The digital advertisement has many more players seeking to get a slice of the $700bn pie.

Rivals such as Amazon (AMZN), TikTok and Snapchat (SNAP) have increased their advertisement units and brands have been flocking to these sites instead of Facebook, Instagram and Google Ads.

Meta and Google earned a peak market share of 54% in 2017, this is now expected to decline to 43% by 2024.

Total ad spend globally is expected to shrink by 6% this year too due to economic uncertainty. This will likely put additional pressure on all tech giants, leaving little room for any missteps.

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Advertising on Instagram, Facebook, Twitter and Google Ads – which includes YouTube and Google search- was once the holy grail of online advertising. These sites had the biggest reach and operated in an almost monopolistic manner.

This meant their fees were unchecked, and this quickly became a major source of income for the companies involved. Alphabet and Meta earned almost half of their income from this, while Twitter earned a strong 90%.

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According to Insider Intelligence, in 2022 the total digital ad revenue reached $567 bn, up 8.9% from 2021.

Other tech firms have joined the race to take advantage of the very lucrative business.

Amazon (AMZN) in particular has been aggressively growing its ecommerce ad business, and will be taking the largest chunk of market share away from Meta and Alphabet.

Andrew Lipsman, principal analyst at Insider Intelligence comments “After a first half of the year with slowing growth that coincided with an overall slowdown in ecommerce, Amazon’s ad business regained momentum in Q3 with the help of the July Prime Day—a success it hopes to replicate during the holiday quarter from the Prime Early Access Sales in October.”

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Insider intelligence expect ad revenues to keep growing but at a slower rate than predicted at the start of the year due to economic uncertainty, instead of the industry producing almost $760bn in revenues, it has lowered expectations to just under £700bn

This slowdown is expected to affect each big tech differently.

The biggest loss is due to  occur to Twitter. The report states that both economic uncertainty and distrust in the CEO has caused the platform’s outlook to be slashed.

Jasmine Enberg, principal analyst at Insider Intelligence comments “Before the takeover, Twitter’s ad business was already taking a beating from the economic uncertainty, tack on Musk’s erratic behaviour, his lack of a clear plan for Twitter’s ad business, as well as fears about misinformation and a user exodus, and many advertisers are suspending their advertising on a platform that already isn’t essential to many companies’ media plans.”

Meta (META)  is also on track to lose its appeal to advertisers. Debra Aho Williamson, principal analyst at Insider Intelligence comments “Meta is no longer an innovative ground breaker, Zuckerberg’s decision to centre his company around a murky and ill-defined concept like the metaverse has jeopardised the near-term health of the company. His vision of the metaverse can’t be willed into reality.”

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Meanwhile Alphabet ‘s (GOOG) business model is likely to provide the best protection to its ad revenues in the coming slowdown period.

Evelyn Mitchell, analyst at Insider Intelligence comments “Google has an edge over its other ad-reliant competitors in an economic downturn, as advertisers facing budget cuts typically prioritise lower-funnel channels with higher ROI like search”

Another company transforming the space is TikTok. “TikTok has transformed from an experimental play to a must-buy for many advertisers,” comments Jasmine Enberg.

While Snapchat (SNAP) struggles “The reality is that many advertisers still don’t fully understand Snapchat and stick it into their experimental buckets. Intense competition from TikTok for the attention of Snap’s core Gen Z user base and continued measurement challenges from Apple’s AppTrackingTransparency changes are also causing advertisers to hold back spending on the platform.”

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