Blog

• by Laurie Sullivan , Staff Writer @lauriesullivan, November 2, 2017

Jason Kint, CEO at Digital Content Next, tweeted a chart on Twitter Thursday showing how Google and Facebook control the advertising market. Using data from eMarketer and others, the chart shows "how the two platforms inhaled the digital advertising market" between 2004 and 2017.

Google and Facebook now own between 60% and 70% market share in the U.S., according to Digital Content Next's chart.   

The dominance of these tech titans should not come as a surprise to anyone. Most of the market share for Google resides in paid search. Facebook dominates display advertising worldwide. Both battle it out for control of the mobile market. 

In a research note published Thursday, RBC Capital Markets Analyst Mark Mahaney wrote "Google’s organic advertising revenue growth has averaged ~20% for 31 straight quarters and grew 22% in Q3:17."

Facebook released third-quarter 2017 earnings Wednesday, reporting that ad revenue grew 49% year-over-year (YoY). Mobile ad revenue came in at $8.9 billion, up 57% from the year-ago quarter and comprising approximately 88% of total ad revenue for the company.

In the third quarter, the average price per ad rose 35% and the number of ad impressions served increased 10%, driven primarily by Feed ads on Facebook and Instagram.

The 35% increases in ad prices is being driven by the auction dynamics. "As supply growth has slowed, then there's more competition, and you're seeing prices increase as demand continues to grow," said David Wehner, CFO at Facebook.

Daily active users in the third quarter reached 1.37 billion, up 16% compared with last year. This number represents 66% of our 2.07 billion monthly active users in the third quarter.

In total, Facebook estimates the social platform has more than 6 million active advertisers. Instagram has more than 2 million advertisers.

Third-quarter total revenue was $10.3 billion, up 47%.