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Facebook beats YouTube and TV as best place to launch new ad campaign in survey of ad buyers

  • Though Google is still the digital ad leader, Facebook is expected to increase its share thanks to the growth of Instagram and video ads, according to a new note from Cowen.
  • Google and Facebook together dominate digital advertising, with about 63 percent between the two of them in 2017, according to eMarketer.
Mark Zuckerberg
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Mark Zuckerberg

Facebook will chip away at Google's dominance in digital advertising thanks to the growth of Instagram and video ads, according to a new research note from Cowen.

Cowen analysts, who surveyed 50 senior ad buyers, said Facebook and Instagram ad budgets will increase in 2018 and 2019, and budgets for Google ads will decline slightly.

Google and Facebook together dominate digital advertising, with about 63 percent between the two of them in 2017, according to eMarketer. This year, the firm projects Google will make $40.08 billion in U.S. digital ad revenue, while Facebook is poised to bring in $21.57 billion.

Though YouTube is still the preferred digital video platform to advertise on, Facebook is encroaching on its top position. In particular, 41 percent of the survey takers considered Facebook video the best place to launch a new ad campaign over TV (25 percent) and YouTube (10 percent). While the digital ad market is expected to have a compound annual growth rate of 13 percent between 2018 and 2023, Google is only expected to increase 11 percent.

There was also increasing interest in advertising on Snapchat-like service Instagram Stories, with ad buyers saying they preferred Instagram Stories over Snapchat.

Both Facebook and Google shares are expected to outperform, with Facebook's price target at $220 and Alphabet's at $1,230.