Diminishing Advertising Dominance of Google and Meta in Favor of TikTok and Streaming Services

Primelis . July 3, 2023

In a significant shift, the long-standing dominance of Google and Meta in the realm of online advertising is waning, making way for TikTok and streaming services to emerge as influential players in the landscape. This trend is poised to shape the advertising landscape in the coming years.

Market Shares of Google and Meta

According to estimations by research firm Insider Intelligence Inc., Google and Meta jointly held a grip on 48.4% of online advertising expenditure in the United States in 2022. This marked the first time their combined market share dipped below the 50% threshold since 2014, and it’s predicted to further decline to 44.9% this year.

While both Google and Meta continue to witness growth in their advertising endeavors, data from Insider suggests their pace of expansion is lagging behind that of the broader online advertising market in the United States.

Challenges confronted Google and Meta in 2022, as the reduced online engagement following the initial pandemic surge prompted cautious advertisers to scale back their spending. Amazon and TikTok solidified their presence as potent forces in the digital advertising realm, while the rise of various streaming services led to a shift in the advertising landscape.

Additionally, Meta and other social media platforms, including Snap, faced the repercussions of Apple’s 2021 decision to require apps on its devices to seek user consent for tracking. This directly impacted Meta’s core competency of precise ad targeting and demonstrating ad efficacy to advertisers.

The Impact on Google was comparatively muted, with its share of the US online advertising market inching up to 28.8% in 2022. However, this figure is expected to recede to 26.5% in the current year.

TikTok, Amazon, and Streaming

TikTok experienced a remarkable surge in market share in 2022, doubling its presence as reported by Insider Intelligence. This surge can be attributed to its nearly 100 million monthly active users in the US, its viral nature, and its influence over Generation Z, Generation Y, and influencers. Nevertheless, its overall market share remains modest, accounting for a mere 2% of total advertising expenditure.

On the other hand, e-commerce behemoth Amazon commanded a share of 11.7% in US advertising investments in 2022, and this is projected to rise to 12.4% in the ensuing year as per Insider’s analysis.

Other players have followed Amazon’s trajectory, expanding their online advertising pursuits. Retail giants Walmart, eBay, Etsy, and Instacart collectively captured about 1.4% of the advertising expenditure in 2022.

The Ascendance of Streaming Services is another noteworthy trend. Advertisers are increasingly redirecting their spending from traditional television to video platforms in order to reach a younger audience.

Insider’s research reveals that platforms like Roku, Disney’s Hulu, Paramount’s Pluto TV, Paramount+, Fox Corp.’s Tubi, and Comcast’s Peacock constituted approximately 3.6% of digital advertising expenditure in the US in 2022. This trend is anticipated to gather pace, particularly with streaming industry giants Netflix and Disney+ introducing ad-supported versions.

Shifting Advertising Investments Toward Digital

Following a remarkable 41% surge in digital advertising investment growth in 2021, the momentum is expected to ease, with an anticipated 9% increase this year, according to GroupM.

Despite the projection of a slower growth trajectory, online platforms continue to command an increasingly substantial portion of the overall advertising expenditure pie. It is estimated that nearly two-thirds of total advertising spending in the US will be allocated to digital advertising in 2023, a stark contrast to the less than half observed in 2019.