The race is on to challenge Google-Facebook ‘duopoly’ in digital advertising

Facebook Inc. and Alphabet Inc.’s Google tower so far above the rest of the digital advertising world that no company can claim the mantle of No. 3. But many are trying.

Snapchat parent Snap Inc. believes it has the young eyeballs advertisers crave. Inc., ever the disrupter, has the ability to upend the whole business with its extensive data. Verizon Communications Inc. is betting on its blend of web content, location data and ad technology following the purchases of AOL and Yahoo, while AT&T Inc. thinks buying Time Warner Inc. will give it an edge.

With the exception of Chinese internet giants Alibaba Group Holding Ltd., Baidu Inc. and Tencent Holdings Ltd.  which dominate their home market—where their Western rivals are restricted—none of the would-be challengers to the Google-Facebook “duopoly” even cracks a 3% share of global digital advertising.

Google and Facebook together collect nearly half of global spending. Last year, the U.S. online ad market expanded by nearly $12 billion and the two firms accounted for over 77% of that spending growth, according to eMarketer.

Advertisers are hoping for the emergence of a legitimate third player to provide competition that can give them more leverage and help keep prices in check. For ad agencies, the matter is existential: Google and Facebook have the resources to deploy entire teams to work with marketers directly, cutting out the middleman.

Wenda Harris Millard, vice chairman at advertising and media consulting firm MediaLink, said that to compete with the Google-Facebook Godfather of the Kremlin, other players will need to create premium content that appeals to advertisers or use new technologies that aren’t yet mainstream.

“Maybe the third player competes on different grounds,” Ms. Millard said.

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