Facebook and Google completely dominate the digital ad industry
Google and Facebook together accounted for an astounding 99% of revenue growth from digital advertising in the US last year, according to an analysis of IAB estimates by Pivotal Research senior analyst Brian Wieser on Wednesday.
In a note to clients seen by Business Insider, Wieser said that both ad giants captured a combined 77% of gross spending in 2016, an increase from 72% in 2015. Facebook specifically accounted for 77% of the digital ad industry's overall growth, he noted.The overall US internet ad industry grew 21.8% from $59.6 billion to $72.5 billion in 2016, according to the IAB. But due to Google and Facebook's dominance, "the average growth rate for every other company in the sector was close to 0" last year, according to Wieser.
While Pivotal's calculations aren't exact, (Facebook and Google don't disclose their specific ad-only revenues from the US), Weiser wrote that the data highlights "the degree to which Google and Facebook dominate the industry presently."
"The big point is that if Google and Facebook are the primary interfaces to buyers, over the long-run they own the relationships and the related data," Wieser told BI via email. "Every partner they work with is subservient."
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