Good News for digital ad sellers: Digital Advertising is expected to finish the year with a year-to-year growth rate of 11.5% in 2017 and grow again in 2018 by 11.3%. That information comes from GroupM/WPP, the world’s largest buyer of advertising. Magna (IPG Mediabrands) pegs 2018 digital growth at 13%.
Bad News for digital ad sellers: Group M believes Google and Facebook will account for 84% of all digital advertising spend in 2017.
Worse News for digital ad sellers: Group M pegs the growth rate on these two platforms at 186% for 2017.
“This is exceedingly bad news for the balance of the digital publisher ecosystem,” GroupM said in a news release. How bad? Well, if Google and Facebook increased revenue by nearly double – and they control between 61% and 84% (depending on which stats you want to believe), that means there is less for everybody else.
Let’s take the more conservative 61% that Statista reports as Google and Facebook’s share of worldwide digital ad spend projected for 2017. The two companies will have grown 3 share points year-to-year. The two together would account for roughly 111% of total digital growth for the year, leaving everyone besides them to split a pie that had shrunk by 11 points.
Exceedingly bad news, indeed.
“In other words, the rest of the online ad industry is evaporating,” said Bob Hoffman in his Ad Contrarian Newsletter.” Absent ‘Goobook,’ online advertising is in free fall and publishers are being forced to play ball with the duopoly or die.”
GroupM points out that the situation could get even worse for digital sellers. It’s betting Amazon is going to also show significant increases in digital ad revenues going forward. “Amazon is on the fast-track to figure more prominently in the consolidation of digital ad investment,” it said.