"Meta Set to Overtake Google as the King of Online Advertising"

[The Financial News]


Meta Platforms is projected to become the first social media company ever to rank first in online advertising market share this year. While long-dominant Google loses momentum, Meta is poised to seize the top spot by leaning on "patience" and "artificial intelligence (AI)."
The Wall Street Journal (WSJ) reported this on the 13th (local time), citing analysis from advertising research firm eMarketer.

According to eMarketer, Meta's net advertising revenue this year is expected to reach 243.46 billion dollars (about 360 trillion won), surpassing Google's forecast of 239.54 billion dollars (about 355 trillion won).
Net advertising revenue refers to ad revenue after subtracting content acquisition costs, such as traffic acquisition expenses and payments shared with creators.
Max Willens, a senior analyst at eMarketer, said Meta has demonstrated "remarkable patience."
Willens noted that Meta did not rush to roll out ads on social media services such as Reels, Threads, and WhatsApp. Instead, it waited until users had firmly built habits around these platforms, then began introducing advertising in earnest once they were on track.
AI is also seen as playing a crucial role.
Thanks to Meta's AI recommendation system, time spent watching Reels in the United States in recent quarters has increased by more than 30% compared with a year earlier. As viewing time grows, ad impressions rise as well.
WSJ reported that at this pace, Reels alone could generate 50 billion dollars in advertising revenue for Meta over the course of a year.

Meta is also reshaping how ads are produced through AI, tightening its grip on the market.
Advertisers can now easily create ads that run on sites owned by Meta Platforms by tapping into AI. They provide text, and Meta AI quickly generates high-quality video advertisements.
This is lifting Meta's earnings as well. In the fourth quarter of last year, revenue from Meta's AI-powered video ad creation tool reached 10 billion dollars.

Google, by contrast, is seeing its share of the online advertising market decline amid intensifying competition.
Consumers are increasingly searching for products directly on Amazon instead of Google, and turning to TikTok to look up the latest trends.
Google's push to diversify its business has also backfired in some respects.
YouTube Premium brings in tens of billions of dollars in subscription fees for Google, but it also allows many users to avoid seeing ads. That, in turn, hurts advertising revenue.
According to eMarketer, Google's share of the U.S. search advertising market is expected to fall below 50% this year for the first time in more than a decade, dropping to 48.5%.
Ultimately, companies such as OpenAI in the AI space and social media platforms like TikTok are expected to reshape the search market.
Meanwhile, eMarketer noted that Meta, Google, and Amazon together form an oligopoly in online advertising. It forecast that the combined global market share of these three companies will rise from 59.9% last year to 62.3% this year.

dympna@fnnews.com Song Kyung-jae Reporter