Google-Meta duopoly continues to creak in their ‘heightened maturity’ as Amazon, Apple ascend

By Seb Joseph

Momentum among the platforms is shifting from Google and Meta to Amazon and Apple. Want proof? Check out the latest earnings update.

Google’s total ad revenues were down for the second time in the company’s history — and it wasn’t just down to YouTube’s well-documented issues. Its search ad revenue, which is normally immune to downturn-included spending cuts, also declined.

The same goes for Meta. It posted its first annual revenue loss in ad revenue.

Amazon and Apple, on the other hand, continue to aggressively rake in ad dollars — albeit into much smaller pots compared to Google and Meta.

The reason for this stark difference in fortunes? More like reasons — some structural, others economic. Bottom line: The unfair advantages that helped propel Amazon and Apple further into advertising are starting to manifest as real leverage for both businesses.

How fast they lean on this leverage remains to be seen. Whatever happens, it won’t be a complete overhaul of the status quo. Google and Meta have too much influence over ad dollars for that.

Even so, it’s clear that this influence is waning. It was doing so throughout last year when ad revenue was growing albeit slowly. The latest quarter did little to change this narrative. If anything, it sealed it.

Facebook’s earnings are a case in point. Its ad revenue growth was actually up 2% in constant currency terms over the fourth quarter, which sounds a lot better than the widely-reported 4% decline. And yet, it doesn’t change the fact that this is a slow-growth ads business now. Look at how fast it was growing during the pandemic, for instance. In the final quarter of 2020, ad revenue was up 31% on a constant currency basis.

The same goes for Google. Clearly, things are bad there when search ad revenue is down. It slumped 1.6% to $42.6 billion over the holiday season. Ad spending on YouTube continued to contract over the same period with ad revenue totaling at $7.9 billion, down 7.8% from $8.6 billion a year earlier.

In contrast, Amazon and Apple’s numbers were a lot more positive.

Amazon scooped up ad revenues of $11.6 billion in the fourth quarter, up 23% compared to the year prior. It’s the sort of high growth that can only happen in an ad slowdown to a business that has Amazon’s ability to supply advertisers with the most up-to-date intent signals possible.

Meanwhile, Apple’s services division, the part of the company that houses its ads business, made so much money over the final three months of 2022 that it set a new record of $20.8 billion. This was a double digit increase on a constant currency basis compared to the same period in 2021 when it rose 24%, said the company’s CFO Luca Maestri.

Needless to say, the shadow both Apple and Amazon have cast over ad dollars is getting longer by the quarter.

No, this doesn’t mean they will have ads businesses as big as …read more

Source:: Digiday