Can Google Continue to Dominate Advertising?

The biggest worry about Google and Facebook is can those two companies continue to dominate advertising? It won’t be an easy task. Google and Facebook’s advertising revenue rose by a combined $US58 billion, which means the two companies were responsible for roughly 70 per cent of all the growth in global advertising. Google’s ad revenue alone has been consistently equivalent to more than 40 per cent of the annual growth in global advertising spending.

Google has proved adept at increasing the number of people using its internet products, boosting the supply of ads it sells and persuading people to click on those pitches. Google’s ad sales have increased by 12 per cent for at least 18 consecutive quarters.

Companies almost have no choice but to advertise on Google search and other areas. If your products and services aren’t prominent in web searches, people won’t find you. And other Google digital hangouts, particularly YouTube, are too popular to ignore for companies that are eager to sell movie tickets, running shoes, auto insurance or etc.

Facebook has warned its revenue growth will slow considerably beginning later in 2017 because it can’t maintain the increase in the number ads. These might sound like arcane things, but it’s means small increases in the number of available advertising slots have a big financial impact.

If Google just maintains of 44 per cent of all the growth in global advertising spending, that would mean only about $US18 billion in new advertising revenue from 2016 to 2018. That means Google isn’t going to generate advertising from the fast-growing market in China, at least not soon.

Like Facebook, then, Google needs to fuel growth the advertising. Google also needs to come up with new tricks for more ad slots. Google Maps is often cited as a target to load up with more ad supply. None of this is easy. Facebook will fight Google for every dollar in advertising. The thing is, Google has for years faced doubts that it can’t possibly to keep Dominate of the world’s advertising

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