The duopoly between Google and Facebook in the world of digital advertising keeps growing year over year.
According to eMarketer, they expect overall digital ad spend in the U.S. to grow 15.9 percent this year—the equivalent of $83 billion in revenue. From this amount, Facebook’s advertising revenue is projected to increase a whopping 32.1 percent while they expect advertising spend on Google will increase 14.8 percent.
Even though Google still controls 40.7 percent of the U.S. digital ad market, Facebook has now grown to own almost 20 percent, but what’s even more telling is that at Facebook’s current growth rate, they will be matching Google’s revenues within the next few years. Google’s dominance will continue in the search arena and eMarketer expects that it will claim $28.5 billion of spend this year, which is 77.8 percent of the total $36.69 billion market. By next year, Google’s search revenues are expected to bring in $32.40 billion of the $40.49 billion industry. So while Facebook is growing fast in the display ads field, Google’s dominance seems to be very well set in the search format.
But we all know that the future (or actually, the present) of advertising is in the mobile ad market. When we look at the mobile medium alone, the so-called duopoly numbers are even more impressive. Google is still ahead with a 32.4 percent of the mobile spend pie, but Facebook is not far behind at 24.6 percent. The two companies now combine for just under 60 percent of the mobile advertising spend dollars.
You can clearly see how if your online advertising budget is still allocated primarily to the traditional Google Display Ad format, you’re already missing a large percentage of potential reach if you’re not dedicating a similar budget to Facebook + Instagram (also owned by Facebook).
Even more critical is the fact that when you focus only on the U.S. market, Facebook’s penetration is even higher with more than 39 percent of mobile ad spend (or around $16 billion in 2017) of the total ad spend. In 2018, it is expected to reach $20 billion and by 2019, it is projected that Facebook’s display ad revenues will be close to $24 billion, at which point, it will represent almost 44 percent of total ad spend.
According to eMarketer, “Facebook’s revenue growth can be attributed to growth in both usage and time spent, which continues to draw advertisers in greater numbers,” while the same report also adds, “Instagram is helping to drive Facebook’s revenue growth—[Instagram] will make up 20 percent of its parent’s U.S. mobile revenue this year, up from 15 percent last year.”
Consider this: according to the latest reports released by Facebook, 1.55 billion people log on to Facebook each month and 1.39 billion visit it on their mobile devices. At one point last August, Mark Zuckerberg announced that Facebook reached an impressive milestone with more than 1 billion users logged into Facebook in a single day!
Even more impressive is the fact that half a billion people ONLY access Facebook via mobile device.
If you add to that the well-known fact that Facebook’s organic reach (that’s non-paid organic posts for you) is pretty much dead, you can easily figure out how the “pay to play” model is now the only way to play. So all of your work over the past years to promote your business page and gain lots of ‘fans’ is now very much useless since only about 0.5 to 1 percent of them will actually see your posts and updates.
So yes, you have to use Facebook ads to reach YOUR audience and there’s no other way around it. However, there’s some good news too and we always like to end our posts on a positive note. When it comes to reaching YOUR audience, Facebook is not only the best option but also the most inexpensive, at least for now. Not only does Facebook allow you to narrow down your audience to the ultimate granular details, but their CPM (cost per thousand impressions) is much lower than Google’s or the majority of any other display advertising channels.
Half billion mobile users + Unique Audience Selection + Lower CPM = You MUST advertise on Facebook.
Or do nothing at your own risk. Thank you for reading. Until next time, this is Manuel Gil del Real. And remember for short and quick MGR marketing updates, be sure to subscribe to our Podcast at www.MGREdge.com