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Amazon set to disrupt the Google/Facebook duopoly amidst soaring digital ad revenues

Global digital advertising spend is anticipated to reach US$520 billion by 2023 accompanied by a disruption of Google and Facebook’s duopoly spearheaded by Amazon’s rising digital ad revenues.

That figure – rising from US$294 billion in 2019 –  and prediction comes from a new analytical study by Juniper Research titled “Future Digital Advertising: Artificial Intelligence & Advertising Fraud 2019-2023”. Its research forecasts average annual growth of 15% on digital ad spend over the next 5 years, driven by the use of AI-based programmatic advertising to deliver highly targeted ads. For the purposes of the study, digital advertising includes online, mobile browsing, in-app, SMS, DOOH (Digital-Out-of-Home) and OTT (Over-the-Top) TV services.

The report finds that US eCommerce giant Amazon’s emerging digital advertising business – driven by its unparalleled consumer retail data – will lead the company to capture 8% of global digital ad spend by 2023.

The report anticipates that Amazon’s advertising revenues will reach US$40 billion by 2023, a growth of 470% from its advertising revenues in 2018. While Google’s advertising revenues will exceed US$230 billion by 2023. 

However, it forecasts that Google’s global market share of digital advertising spend will fall 1% over the next 4 years due to the growth of competing platforms, including Amazon and Baidu. Amazon is expected to leverage its retail data and heavy investment in machine learning to offer efficient targeting via its advertising platforms and attract users from both Google and Facebook.

“Giving algorithms access to the vast amounts of data generated by advertising traffic, including purchasing habits, user buckets and geographical location, is critical to enabling advertisers to secure a return on their ad spend,” said the study’s author, Sam Barker.

The report predicts that advertising platforms will focus on increasing access to contextual advertising traffic data to maximise the efficiency of machine learning for targeting abilities. As a result of these efforts, 75% of global online and mobile ads are forecast to be delivered via AI-based programmatic advertising by 2023.

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