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The Data Digest: eCommerce May Be The Only Way To Challenge The Google/Facebook Duopoly

Brandon Verblow
Associate Forecast Analyst
September 20, 2017

As will be no surprise to advertising industry watchers, the duopoly of Google and Facebook once again demonstrated its dominance of the ad market following the release of their Q2 2017 earnings results. According to Forrester’s just launched Digital Marketing Tracker report, Google and Facebook accounted for 74% of both ad revenue and growth among the 13 global companies covered in the tracker.

Google and Facebook are the usual suspects, but number 3 is surprisingly enough an eCommerce platform: Alibaba. Alibaba accounts for 9% of global online ad revenue and 16% of growth. Although Alibaba does not compete directly with Google and Facebook (yet), it does underscore the power of combining eCommerce and advertising. For example, Alibaba’s ad revenue in Q2 2017 was almost twice that of social network WeChat owner Tencent and search engine provider Baidu combined.

Of course, the dynamics of China’s ad market and Chinese consumer behaviors are different from those in the US. As we discussed in a recent Forrester brief, Chinese internet services like Tencent are less dependent on ad revenue because they receive a large chunk of revenue from fees that customers pay for value-added services. Chinese consumers are also more avid online retail shoppers. According to the Forrester Data Report: Online Retail Forecast, 2016 To 2021 (Asia Pacific) and Forrester Data: Online Retail Forecast, 2017 To 2022 (US), the online retail share of total retail in 2016 was 65% higher in China than in the US.

However, Google and Facebook should take heed. Respondents to the Forrester Data Consumer Technographics North American Retail And Travel Customer Life Cycle Survey, Q1 2017 (US) told us they were more than twice as likely to find out about the brand of a recent purchase from Amazon as from online search. And Amazon was eight times as popular for discovering brands as social media or blogs.

For more detail, Forrester’s ForecastView clients should view our recently released Forrester Data: Digital Marketing Tracker, Q2 2017 — a report we developed as a means to provide marketers and media professionals with a quarterly update of online advertising revenue trends globally. It includes revenue data and, wherever available, user and revenue-per-user data for 13 key digital media and services companies from Q1 2015 to Q2 2017.

The companies included are Google, Facebook, Twitter, Snap, Alibaba, Baidu, Tencent, SINA, Sohu, Yahoo! Japan, LINE, NAVER, and Yandex. This group constitutes roughly 75% of the global online advertising market and provides broad geographic coverage of trends in North America, Europe, and Asia Pacific.

Related Forrester Content (For clients or purchase)

Forrester Data: Digital Marketing Tracker, Q2 2017
China's Social Networks Have Room To Generate Higher Advertising Revenue
Forrester Data Report: Online Retail Forecast, 2016 To 2021 (Asia Pacific)
Forrester Data: Online Retail Forecast, 2017 To 2022 (US)
Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q1 2017 (US)
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