Antitrust Actions Target Google and Meta, Complicating the Digital Ad Market

US Government Takes Aim at Google and Meta

On April 17, a federal judge ruled that Google has an illegal monopoly on the online advertising technology sector. The Department of Justice argues that Google must give competitors access to its ad technology. Meanwhile, Meta is on trial for its 2012 acquisition of Instagram, which the Federal Trade Commission is now positioning as an attempt to stifle competition. If the FTC prevails, Meta may have to sell off Instagram.

The Impact on Fashion Brands

Fashion marketers are already comparing the antitrust actions to Apple’s introduction in 2021 of new privacy settings that allowed iPhone users to opt out of being tracked across apps. This decision had major consequences for advertisers, as it made it harder for brands to target ads on social media, prompting a scramble to find alternative channels that continues today.

Consequences of the Antitrust Crackdown

If the government prevails in its cases against Meta and Google, both companies risk losing their massive reach, forcing advertisers to spend on a wider range of platforms, with more difficulty in reaching the largest audiences possible. The government argues that advertisers would benefit from an increase in competition, without two companies dictating ad pricing for the entire industry.

Uncertainty in the Digital Ad Market

This uncertainty comes during an already turbulent period in the market. Higher tariffs on imported goods have rattled consumer confidence and threatened to impact spending, making it more challenging for brands to connect with their target audience.

“The difficulty of reaching consumers is increasing, and that trend is going to continue,” said James Nord, founder and CEO of influencer marketing agency Fohr.

The Digital Ad Market: A Complex Ecosystem

In advertising, Google and Meta are two unstoppable forces. Google generated $83 billion in advertising revenue in the US in 2024, with a share poised to grow to $107 billion by 2027. Meta brought in $67 billion in ad sales in the US last year, and is on track to hit $92 billion by 2027. Challenges in Advertising
Despite their dominance, Google and Meta are not as seamless as their presence suggests. Brands advertising on these platforms face various challenges, including:

• Increasing costs: More brands have continued to migrate their advertising spend to Google and Meta, driving up costs for both companies.
• Limited options: The proposed remedy by the government could create its own problems, limiting the options for advertisers.
• Dependence on a single platform: Brands are heavily reliant on Google and Meta for advertising, making them vulnerable to disruptions.

Alternative Marketing Channels
The government argues that online advertisers deserve more options. However, the proposed remedy would create its own problems. With brands having migrated more of their advertising spend to Google in the last four years, the stakes are high for the tech giant in its fight against the Department of Justice. Investing in Alternative Channels
Fashion and beauty labels are already exploring alternative marketing channels, such as Pinterest and Snap. However, these platforms have a smaller reach, making it more complicated to achieve similar impact.

1. Pinterest generated $2.7 billion in ad revenue in the US in 2024, while Snapchat brought in $2.1 billion, according to eMarketer’s estimates.
2. Creating compelling content across different apps is crucial to success.
3. Building a real moat that brands can build is content distribution.

Online Marketplaces in the Digital Ad Shakeup Online and offline retailers have built their own ad networks to incentivize more brands to sell on their marketplaces. Fashion and beauty labels buy ads on Amazon to appear higher in search results and ward off sales from unauthorized sellers.

Marketplace	Ad Revenue (2024)	Change (2024)
Amazon	$40 billion	18%
Target	$649 million	24%
Walmart	$3.9 billion	32%

The Role of Online Marketplaces Marketplaces can play a significant role in the digital ad shakeup. Online and offline retailers can incentivize brands to sell on their marketplaces, driving up ad revenue. However, marketplaces require brands to give up a cut of sales on top of paying for ads. Opportunities and Challenges The crackdown may present an opportunity for brands to explore alternative marketing channels and online marketplaces. However, it also poses challenges, such as the potential for decreased revenue and increased competition. Preparing for the Digital Ad Shakeup Brands must streamline their strategies and make conscious, educated decisions to navigate the changing digital ad landscape. They need to use business intelligence to understand what categories and products drive revenue and consumer behavior. “If they aren’t using business intelligence to already understand what categories and what products are driving revenue and behavior of their consumer, then they need to go back to the drawing board,” said Katie Moro, global director of managed service at software firm Productsup. By exploring alternative marketing channels and online marketplaces, brands can build a real moat that is content distribution. They can create compelling content across different apps and build a strong presence in the digital ad market. Ultimately, the potential shifts in digital advertising will push brands to streamline their strategies and make conscious, educated decisions.