Why Google Should Guard Its Turf In Online Ad Space
Google has been the undisputed leader in online advertising until now. But this may change sometime soon, believe experts. Among a flurry of new names that had popped up in this space, the biggest rival is touted as Facebook, which is reportedly gaining quickly in the fast-evolving market.
While Google continues to enjoy a third of the $140 billion Internet ad market in 2014, Facebook’s share has doubled over the past two years to nearly 8 percent, according research firm eMarketer. Moreover, Facebook, with a population of 1.3 billion around the world, which is rapidly growing, is giving strong signals to Google to guard its turf.
Guarding its turf
The battle is particularly intense in the fast-growing mobile ad segment, where Google’s share has dipped slightly over the past two years to 44.6 percent while Facebook has grabbed 20 percent of those revenues worldwide, up from just 5.9 percent in 2012, the research firm says.
Experts believe Facebook is particularly well-equipped to deliver “targeted” ads that are relevant, based on the browsing history of each users, in part by using the “Facebook login” feature for many websites and services.”Because of that Facebook login, they can track people across devices and understand their behavior,” eMarketer’s researcher Cathie Boyle told AFP. “Now they’re letting advertisers leverage that information beyond just ads on Facebook, which plays to challenging Google,” she said.
While privacy activists object to behavioral marketing, this type of advertising is generally seen as effective because it makes more efficient use of ads and eMarketer sees a number of enterprises using this technique to track behavior as users switch from their PCs to tablets or smartphones.
The report finds that the login system used by both Facebook and Google are becoming more important as more people use ad blocking technologies or “private browsing” which prevents marketers from using web histories. While both Facebook and Google have the unique login that can be used to identify the user across different devices, researchers believe Facebook acted on it first.
Beating the rivals
A Forrester study suggests Google and Facebook are not the only companies using these techniques. While Yahoo and AOL have a fair amount of share in this market, others such as Twitter, Pandora and even Apple also can monitor the activity of its users for marketing through its login feature.
EMarketer however thinks these companies cannot challenge Google on “search advertising,” which is unique in the sense that it uses keywords for search queries to deliver ads related to those searches. “Because Google is overwhelmingly dominant as a search engine, it logically controls most of the ad search market as well,” it says.
But the ad market could face a shakeup from Amazon, which according to a WSJ report is working on its own advertising platform.
Google chairman Eric Schmidt has also said the firm’s biggest rival in online search is Amazon, which is expanding its business beyond its core e-commerce. “Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon,” he said in a speech in Berlin, adding that he was still wary of the “next Google”.
For now however, it is Facebook, which has thrown a tough challenge before Google. Researchers expect Google will also make new announcements sometime soon on ad network enhancement in order to sustain its dominance.
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