Healthy markets are defined by competition. Consumers have many providers to choose from, and those providers must constantly innovate to improve their service or make efficiency savings to be able to reduce their price - or else the consumers will move to a competitor which is doing so. Monopolies are terrible for consumers because they are defined by a lack of competition - hence why in most countries regulators explicitly ban companies from establishing monopolies in most sectors. But what about Duopolies? This is when a market is dominated by two large players - they still compete, but often the competition is less fierce because of the lack of other providers.
As new stats from IAB, Facebook and Google show, the digital ad market is entering duopoly territory. Google and Facebook saw very healthy rises in ad spend, but other digital ad providers saw sales shrink.
As you can see from the chart below, Google and Facebook now make up 2/3rds of the online ad market, leaving everyone else making up only 1/3rd of online ad sales.
This may be because Facebook and Google offer superior service and better value, but it is important that the market retains other providers to keep it dynamic.
By Robert Allen
Rob Allen is Marketing Manager for Numiko, a digital agency that design and build websites for purpose driven organisations, such as the Science Museum Group, Cancer Research UK, University of London and the Electoral Commission. Rob was blog editor at Smart Insights from 2015-2017. You can follow Rob on LinkedIn.
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