Tuesday, 25 June 2019 11:36

Amazon ‘disrupts’ Google, Facebook as digital advertising spend to reach US$520 billion: report Featured

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Amazon ‘disrupts’ Google, Facebook as digital advertising spend to reach US$520 billion: report Image David Castillo Dominici, FreeDigitalPhotos.net

Amazon is disrupting the digital advertising market for the Google and Facebook “duopoly”, according to one global research firm which reports that global spending on digital advertising is forecast to reach US$520 billion by 2023.

The increased spending — rising from US$294 billion this year to US$520 billion in 2023 — represents an average annual growth of 15% over the next five years, according to a new study by Juniper Research.

The new research — Future Digital Advertising: Artificial Intelligence & Advertising Fraud 2019-2023 found that Amazon’s emerging digital advertising business, driven by its “unparalleled consumer retail data”, would drive the company to capture 8% of global digital ad spend by 2023 – forecast to rise from 3% in 2018.

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

And Juniper says Amazon will leverage its retail data and heavy investment in machine learning to offer efficient targeting via its advertising platforms, and “attract users from the established duopoly of Google and Facebook”.

According to the study, Google’s advertising revenues will exceed US$230 billion by 2023.

But, despite this, the study forecasts that Google’s global market share of digital advertising spend will fall 1% over the next four years due to the growth of competing platforms, including Amazon and Baidu.

Digital advertising includes online, mobile browsing, in-app, SMS, DOOH (Digital-Out-of-Home) and OTT (Over-the-Top) TV services.

The report also anticipates 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, the report notes that 75% of global online and mobile ads are forecast to be delivered via AI-based programmatic advertising by 2023.

Research author Sam Barker said: “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.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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