We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is FB-GOOGL Ad Duopoly Under Threat as AMZN Gains Steam?
Read MoreHide Full Article
Digital advertisements have been gaining widespread popularity since some time now. This can be primarily attributed to low costs and an algorithmically narrowed target audience compared to television advertisements. Per a recent report by Magna Global, digital ad spending will constitute almost 50% of total spending for advertisements in the United States in 2018.
In such a scenario, companies offering digital advertisement platforms have been witnessing a surge in demand for their offerings eventually adding to their top-line growth.
Google & Facebook’s Waning Dominance in Digital Ad Spending
The most prominent names in this space are Alphabet’s (GOOGL - Free Report) Google division and Facebook , given their market share in digital advertising spending, which surpasses that of the other players combined together.
However, it is important to note that the combined market share is expected to witness a decline in 2018 per a recent report by eMarketer. The share of the two companies in the digital advertising spending, which was recorded at 58.9% in 2017, is expected to decline to 56.8% in 2018 and to 55.6% in 2020.
eMarketer also forecasts digital ad spending to reach $273.29 billion in 2018 and $357.31 billion by 2020 from $232.27 billion in 2017.
Notably, Facebook generated around 98% of its total revenues from advertising in 2017. In comparison, , Google’s ad revenues contributed to 86% of its total revenues during the same period. Both the companies registered year over year growth in advertising revenues.
However, in a situation where spending for digital advertisements is poised to increase, declining share of Facebook and Google is an area of concern for these Zacks Rank #3 (Hold) companies. This is all the more true as the advertising segment is the largest revenue contributor for both the companies.
Is Amazon Stealing Share?
Amazon (AMZN - Free Report) seems to be the underdog in this domain and can turn into an indomitable force given its huge base of online shoppers.
In first-quarter 2018, Amazon recorded revenues of $2.03 billion at its “Other” segment, which primarily consists of sales of advertising services. This figure marked a whopping year-over-year increase of 130%, much higher than Facebook’s 50.1% and Google’s 23.5%.
Notably, the use of the new accounting standard added about $560 million to its Other revenue segment in the first quarter of 2018. There was a significant increase in segment revenues even when these changes were adjusted.
Per eMarketer’s Monica Peart, senior director of forecasting, Amazon, currently fifth among the digital advertisement platform providers in the United States, is on track to reach the third position by 2020.
Management is counting on this comparatively higher margin segment as a potentially strong contributor. Reportedly, Amazon has been testing the standing of its advertising offerings against Facebook and Google.
Notable marketing firm Omnicom’s (OMC - Free Report) CEO John Wren stated that Amazon is “coming over the hill” and posing a bigger threat to Google and Facebook.
We believe Amazon’s ad initiatives will be a major driving force to achieve the growth projected for digital ad spending through 2020 and beyond.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Is FB-GOOGL Ad Duopoly Under Threat as AMZN Gains Steam?
Digital advertisements have been gaining widespread popularity since some time now. This can be primarily attributed to low costs and an algorithmically narrowed target audience compared to television advertisements. Per a recent report by Magna Global, digital ad spending will constitute almost 50% of total spending for advertisements in the United States in 2018.
In such a scenario, companies offering digital advertisement platforms have been witnessing a surge in demand for their offerings eventually adding to their top-line growth.
Google & Facebook’s Waning Dominance in Digital Ad Spending
The most prominent names in this space are Alphabet’s (GOOGL - Free Report) Google division and Facebook , given their market share in digital advertising spending, which surpasses that of the other players combined together.
However, it is important to note that the combined market share is expected to witness a decline in 2018 per a recent report by eMarketer. The share of the two companies in the digital advertising spending, which was recorded at 58.9% in 2017, is expected to decline to 56.8% in 2018 and to 55.6% in 2020.
eMarketer also forecasts digital ad spending to reach $273.29 billion in 2018 and $357.31 billion by 2020 from $232.27 billion in 2017.
Notably, Facebook generated around 98% of its total revenues from advertising in 2017. In comparison, , Google’s ad revenues contributed to 86% of its total revenues during the same period. Both the companies registered year over year growth in advertising revenues.
However, in a situation where spending for digital advertisements is poised to increase, declining share of Facebook and Google is an area of concern for these Zacks Rank #3 (Hold) companies. This is all the more true as the advertising segment is the largest revenue contributor for both the companies.
Is Amazon Stealing Share?
Amazon (AMZN - Free Report) seems to be the underdog in this domain and can turn into an indomitable force given its huge base of online shoppers.
In first-quarter 2018, Amazon recorded revenues of $2.03 billion at its “Other” segment, which primarily consists of sales of advertising services. This figure marked a whopping year-over-year increase of 130%, much higher than Facebook’s 50.1% and Google’s 23.5%.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
Notably, the use of the new accounting standard added about $560 million to its Other revenue segment in the first quarter of 2018. There was a significant increase in segment revenues even when these changes were adjusted.
Per eMarketer’s Monica Peart, senior director of forecasting, Amazon, currently fifth among the digital advertisement platform providers in the United States, is on track to reach the third position by 2020.
Management is counting on this comparatively higher margin segment as a potentially strong contributor. Reportedly, Amazon has been testing the standing of its advertising offerings against Facebook and Google.
Notable marketing firm Omnicom’s (OMC - Free Report) CEO John Wren stated that Amazon is “coming over the hill” and posing a bigger threat to Google and Facebook.
We believe Amazon’s ad initiatives will be a major driving force to achieve the growth projected for digital ad spending through 2020 and beyond.
Amazon currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>