Google, Facebook and their story behind controlling 60% of India’s digital ads

Google, Facebook and their story behind controlling 60% of India’s digital ads
Google and Facebook account for 60% of digital advertising as retailers look for alternatives to advertise on other platformsWikimedia Commons/Business Insider India

  • The duopoly between Google and Facebook accounts for 60% of digital advertising.
  • Google leads with a chunky 37% market share.
  • The application of artificial intelligence (AI) and machine learning (ML) have been primary factors helping Google yield a higher return on investment for their clients.
The duopoly between Google and Facebook accounts for 60% of digital advertising. As these tech giants lead the market, others are hoping that Indian IT service providers will help them increase their own returns from online ads, according to Edelweiss Research.

Direct to consumer brands in retail — brands that want to sell online but don’t want to go the traditional route — are looking for alternatives to the duopoly so that they can tell their stories on other channels as well.

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For Google and Facebook, artificial intelligence (AI) and machine learning (ML) have equipped these platforms to boost the return on investment for their clients. That has helped retain an edge over their competitors in the market — with Google leading the way.

Push for other advertisers

Retail is a major vertical for a lot of Indian IT players — like TCS, Wipro and Infosys — and Edelweiss Research suggests that it could be a major revenue driver going forward.

The sector is already undergoing major restructuring with the entry of Amazon forcing retail players to embrace technology faster to stay relevant. US players like Sears and ToysRUs have already filed for bankruptcy after losing ground in a rapidly changing environment.

As FAANGs — Facebook, Apple, Amazon, Netflix and Google — continue to be market leaders, the rest of the industry is looking to Indian IT services vendors to help them keep up.

Companies like Walmart have already roped in Indian firms and have started to spend massively on tech in order to stay relevant in the market.

Google is everywhere

Google, the world’s organiser of information accounts for 37% of all digital spending. The world’s most popular social network comes in second with 24% of the market share according to Edelweiss Research.

According to Zenith and WARC, digital ad spend will hit 47% of all ad spend this year and rocket to 52% by 2021.

Being a dominant operating software on smartphones has helped Google’s navigate digital advertising.

Google’s entire G-suite of products — Gmail, YouTube, Google Search etc. — are some of the most popular apps in the world. They come pre-installed on the 2.3 billion Android phones in the world right now.

Added to that, Google Search dominates 90% of the worldwide search engine share and 98.12% of the market in India, according to statcounter.

Getting higher returns

Online ads have changed but so has the way that they are delivered. Using AI, Google first introduced it to write text-based ads of their clients. Once those ads were and running, Google used an algorithm to place them across its entire network of apps to maximise return.

The logic behind the ‘personalisation’ empowered by ML is that users get to see those ads, which are the most relevant to them. Retailers, their clients, get to reach out customers who are most likely to need or buy their product. As time goes by and the algorithm gets more data, its able to target users with sharper precision.

The combination of both those factors enhances the accuracy of digital advertising and the reach of advertisers, yielding a higher return on investment.

In the past, Facebook has been accused of their ad targeting algorithms discriminating by race and gender, even if the parameters of the ad specify no to do so.

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