The digital advertising industry is turning into an anti-competitive environment controlled by a handful of global companies. According to eMarketer, the U.S. digital ad market is now worth over $134 billion. Of this, Google commands an almost 30% share, Facebook takes around 23% and Amazon just under 10%.

Apple is looking to join these players with updates to its proprietary search technology — released in its iOS 14 update — suggesting it is building a rival to Google’s search engine. Apple already uses its smartphones and software to leverage control and take unreasonable commissions from app makers. It can single-handedly decide to enable features by default, suggest its default search engine or prioritize content within Apple News over other content apps.

But it is difficult to predict the outcome of Apple’s updates, as not all of its default services have captured consumer interest; Google still owns the majority of mobile apps on the market. Moreover, Google has extended its authority far beyond search and apps. Alongside its reluctance to share revenues with publishers, the tech giant is effectively a gatekeeper to the digital ecosystem with its DV360 dominating programmatic display. And its latest announcement regarding third-party cookie alternatives sends a clear message to adtech companies that it has no intention of ceding its predominant market position.

The balance of power in adtech needs to shift, and there are already a number of trends in motion to bring this about.

Regulatory pressure is opening new opportunities.

Multiple investigations are underway against the major platforms, which may result in a forced breakup of their current assets. Last October, for instance, the U.S. Department of Justice launched a case over the multi-billion-dollar payments Google makes to smartphone companies to give prominence to its search service, effectively suppressing the competition. While the outcome of the case is still far from clear, a breakup of Google has not been ruled out.

In Europe, cabinet ministers in France and the Netherlands are urging regulators to take preemptive action against major tech companies to limit their control over the market, and the U.K.’s Competition and Markets Authority has launched a new Digital Markets Unit aimed at curbing the dominance of tech giants. It has also opened an investigation into Google’s Privacy Sandbox following concerns it will result in ad spend being further concentrated in Google’s ecosystem. Increased regulatory action of this nature will likely loosen big tech’s grip on digital advertising and create space for a stronger, fairer, more competitive environment.

Retail is the chink in Google’s armor.

Market share for the triopoly is already shifting. Google is no longer the go-to search engine for retail goods in the U.S., with 63% of consumers starting their search for products on Amazon. While Google’s share of the digital ad market is shrinking, Amazon’s is growing because it, and other retail platforms like Walmart, have a key advantage as media sellers. These platforms are powered by a potent combination of high-intent keyword searches and purchase data, providing greater ability to optimize ad targeting.

Amazon is making significant gains with search and display ads on its owned and operated digital properties, and is also expanding into the programmatic space. Fueled by its header-bidding integrations, Amazon is gaining ground as a demand source, delivering increased transparency for advertisers and more effective ROI measurement. The pull of stronger targeting capabilities points to advertisers demanding greater efficiency and heightened relevancy for users.

This shift in ad spend from Google to Amazon highlights a lack of purchase history data within Google’s ecosystem, which it tries to compensate for by preventing its rivals from building useful catalogues of ad targeting information. The most recent updates on Privacy Sandbox illustrate there will be no way for platforms outside of Google to target their customers or track conversions. Fledge, Turtledove and other initiatives by Alphabet subsidiaries are very unlikely to replace technologies that are currently in place. Other platforms outside of the triopoly that can deliver on advertiser needs — for instance, with non-segmented user matching and contextual targeting — will expand their market share in the year ahead by being transparent, adaptable and privacy-conscious.

Publishers need to renegotiate their relations with big tech.

Publishers have traditionally relied on the major tech companies to distribute and monetize their content, and don’t necessarily receive fair value in return. Facebook’s content monetization policies are far from transparent due to constant algorithm changes and restrictions on Instant Articles monetization by third-party vendors. Facebook decides what to show to audiences of content creators who have been accumulating subscribers thinking they control this asset. Reach is the key driver behind publishers’ uptake of this closed ecosystem, as Instant Articles remains the most accessible means of connecting with audiences on the Facebook app.

Policies around the monetization of Google’s AMP-pages are less self-serving, but nevertheless Google has enough resources to prioritize its internal demand over others. Apple is particularly effective at winning eyeballs, and high traffic levels on Apple News often result in incredible page views. But because Apple restricts the ad units that can be sold around content, this doesn’t necessarily translate into high publisher revenues.

Google, Facebook and Amazon are currently the dominant forces in the adtech market, but the balance of power will have to change, and a key part of this shift will stem from growing consolidation across the industry. Merger and acquisition activity is growing, including Magnite’s acquisition of SpotX and LiveRamp’s acquisition of DataFleets.

IPOs are also on the rise, with some players such as PubMatic, Viant and DoubleVerify choosing the conventional route, while others such as TripleLift, IronSource and Taboola are exploring the special purchase acquisition company (SPAC) alternative. These industry developments will heighten industry competition and diversify the market.

With regulatory bodies placing pressure on the triopoly from above, alternative platforms pushing up from below and publishers looking for alternative ways to monetize their valuable content, the digital advertising industry will no doubt become more competitive as 2021 progresses.

(As published on Forbes)