Meta, the parent company of Facebook, is expected to overtake Google this year to rank No. 1 in global digital advertising revenue.
Market research firm eMarketer said on the 13th (local time) that Meta's advertising revenue forecast for this year is $243.46 billion (about 360.6 trillion won), slightly ahead of Google's $239.54 billion. The figures are net revenue, excluding payments to content creators and other expense items.
Google has long held the digital advertising crown on the back of its monopoly position in search and the popular video platform YouTube, but the chances have grown that Meta will take the top spot for the first time this year.
eMarketer projected that Meta's advertising revenue will increase, powered by Instagram's short-form (short video) feature "Reels" and artificial intelligence (AI) capabilities on its flagship social media (SNS) platform.
Max Willens, a senior analyst at eMarketer, said Meta showed "remarkable patience" in introducing ads after building user bases on Instagram Reels, the WhatsApp messaging service, and the SNS platform Threads. He said, "Surpassing Google effectively proves the effectiveness of Meta's core advertising strategy."
According to eMarketer, Meta's global ad growth rate is expected to rise to 24.1% this year from 22.1% last year. By contrast, Google's ad growth rate is expected to stagnate at 11.9% this year.
After Meta applied an AI personalized recommendation algorithm, Reels watch time in the United States alone increased 30% in the first quarter from a year earlier, enabling ads to be shown to more users. The Wall Street Journal (WSJ) reported, "Meta estimates Reels will generate $50 billion in revenue over the next year."
Google has long generated massive advertising revenue and profit based on its dominance in the search market, but it is now facing challenges from competitors such as Amazon. That is because users have begun searching for and buying products directly on online shopping malls without going through Google search.
eMarketer projected Google's U.S. search ad market share estimate at 48.5% this year, falling below 50% for the first time in a decade. eMarketer said, "AI corporations such as OpenAI and SNS platforms such as TikTok will reshape the search market going forward."
WSJ reported that YouTube's subscription model is also a double-edged sword for ad growth. As more users subscribe to YouTube Premium, subscription revenue increases, but fewer ads are shown on YouTube, which negatively affects advertising revenue.
Still, even if the digital advertising rankings change, Meta, Google, and Amazon continue to dominate the overall market, eMarketer assessed. The corporations' share of the global digital advertising market is expected to rise to 62.3% this year from 59.9% last year, further strengthening their market power.