Dive Brief:

• Facebook and Google will receive a combined 56.8% of U.S. digital ad investment in 2018, a decrease from 58.5% last year, as Amazon and Snapchat experience growth. The leaders' share of new digital ad revenue is also declining and is expected to reach 48% this year, down from 73% in 2016, according to eMarketer forecasts. 
• Amazon's U.S. ad revenues are expected to jump 63.5%, surpassing $2 billion for the first time. The increase will give Amazon a 2.7% of the U.S. digital ad market, a share that will grow to 4.5% by 2020. This year, more than one-third of Amazon's ad revenue will come from mobile, giving the company a 1.3% share of overall mobile ad revenue. 
• Snapchat's ad revenue is forecast to grow 81.7% in 2018, reaching $1 billion for the first time. The increase will give the company a 1% share of U.S. digital ad spending, up from 0.6% last year. Facebook's share of U.S. digital ad spend is forecast to drop to 19.6% this year from 19.9% last year even as its overall ad revenues climb 16.9%. Google's share is expected to drop to 37.2% from 38.6%, with revenues increasing 14.5%.

Dive Insight:

Marketers have long wished for a digital marketing landscape not dominated by just two major players — Google and Facebook. More digital ad competition levels the playing field for marketers, allowing them to negotiate better ad buys and seek out new advertising opportunities. A short while ago, it seemed unlikely that either's tight grip on the space would loosen, which is what makes the eMarketer findings surprising. However, as the fake news issue continues to escalate, with the efforts of both Facebook and Google to rebuild trust merely pinching brands without seeming to stem the tide of low-quality content, this is opening the door to platforms like Amazon and Snapchat.

As Amazon successfully extends its reach into content via Prime Video and hardware via Echo and related devices, brands are giving it a closer look. Amazon also offers marketers a rich trove of customer data, including highly coveted transactional data, that could help them better target their campaigns. To position itself for a bigger advertising play, Amazon has been making improvements to its Amazon Marketing Services platform. These efforts appear to be paying off. In its recent Q4 earnings report, Amazon reported that its "other" revenue, which includes advertising, grew 60% year-over-year to $1.7 billion for the quarter. Ad spend on sponsored products increased 64% and headline search ads increased 75%. 

Snapchat, while plagued with sluggish user growth, has been making gains on the advertising front because of its ability to reach younger consumers with custom content. A recent promotion for Jordan Brand also showed its potential for driving m-commerce. 

While brands are excited about opportunities on Amazon and Snapchat, it's a different story for the current leaders. Facebook's new algorithm changes that will prioritize personal posts over brands and publishers have left marketers uncertain of how their ads will be affected. Google has placed tougher requirements on YouTube creators and eligibility requirements to ensure videos are safe for ads. 

Instagram is one bright spot for Facebook. EMarketer projects that the photo-sharing platform will draw $5.48 billion in ad revenue in 2018, 5% of the U.S. digital ad market. Mobile ad earnings for Instagram are expected to reach 7.3%, accounting for 28.2% of Facebook’s U.S. mobile revenue.

As Amazon and Snapchat's ad revenues continue to grow faster than expected, Twitter is facing a second consecutive year of decline in its ad earnings, according to eMarketer. In 2018, ad revenue is expected to drop 4.9% to $1.12 billion, giving it 1% of the market share, below the 1.5% that eMarketer predicted last fall. However, the company is expected to rebound in 2019.