Explainer: The Digital Advertising Disruption Coming for Fashion

The digital advertising market may be on the verge of a major shakeup, as the US government targets Google and Meta for antitrust actions — further complicating the online ad space as more fashion brands invest in their e-commerce businesses.

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

How Google and Meta will fare in the government’s antitrust crosshairs is uncertain. But fashion marketers are already comparing the legal actions to Apple’s introduction in 2021 of new privacy settings that allowed iPhone users to opt out of being tracked across apps. That decision had major consequences for advertisers, as it made it harder for brands to target ads on social media, touching off a scramble to find alternative channels that continues today.

That impact, however, would pale in comparison to the consequences of the government prevailing in its cases against Meta and Google, experts say. 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.

This uncertainty comes during an already turbulent period in the market. As higher tariffs on imported goods rattles consumer confidence and threatens to impact spending, finding effective methods for connecting with consumers has never been more important.

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

What does the antitrust crackdown mean for the digital ad market?

In advertising, Google and Meta are unstoppable forces. Google generated $83 billion in advertising revenue in the US in 2024, the highest of any company, a share poised to grow to $107 billion by 2027, according to estimates from eMarketer. Meta brought in $67 billion in ad sales in the US last year, and is on track to hit $92 billion by 2027.

Even though Apple’s privacy changes made ad targeting more difficult, brands heavily rely on both to build their businesses. Facebook and Instagram are typically used to build awareness through influencer marketing, while brands invest in Google ads to get in front of consumers when they’re actually looking to make a purchase.

But advertising on Google or Meta is not as seamless as their dominance suggests. More brands advertising — including big spenders like ultra-fast fashion giants Shein and Temu — has continued to force up costs on Meta and Google. Meta’s cost per thousand impressions has risen 13 percent year over year since the beginning of 2024, according to data from marketing agency Belardi Wong.

The government argues that online advertisers deserve more options, but 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. US district judge Leonie Brinkema argued that following its acquisition of software start-up DoubleClick, which developed and sold technology that helped companies buy and sell ads online, Google enhanced those tools and pushed websites to use its software to both sell ads and manage their ad businesses.

“We disagree with the Court’s decision regarding our publisher tools,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs in a statement. “Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”

Meta divesting from Instagram would pose a similar threat. In the years following the iOS 14 update, Meta built new tools to help brands aggregate customer data and better target ad campaigns, which benefit from Facebook and Instagram sharing data, said Calla Murphy, senior vice president of digital strategy and integrated marketing at Belardi Wong. Spinning off Instagram, she said, would leave brands with fewer insights.

“If you break up Facebook and Instagram, it’s less data they have to match you with advertisers,” Murphy said. “That’s something we have been through with Apple iOS, but it’s another break.”

How should brands prepare for potential disruption?

The shifts in digital advertising in the last five years — from Apple’s privacy rules to a looming TikTok ban — has alerted advertisers to the dangers of relying on a few channels. The smartest have already started investing in alternatives.

That’s partially why Google and Meta argue that they already have plenty of competition. TikTok, which Meta executives have named as a primary adversary in its counterarguments, has increased its share of the US digital advertising pie by 41 percent year over year to $12 billion in 2024 as the 2023 arrival of TikTok Shop helped brands funnel ads into direct sales on the platform. But the Chinese ByteDance-owned company still faces a US ban if it fails to sell to an American firm.

Now might be an ideal time to explore those alternative marketing channels. Shein and Temu have pulled back sharply on US marketing as the Trump administration puts up barriers to Chinese imports. From March 31 to April 13, Temu cut its ad spend on Meta, TikTok, Snap, X (formerly Twitter) and YouTube by 31 percent; Shein slashed its spend on Meta, TikTok, YouTube and Pinterest by 19 percent, according to market intelligence firm Sensor Tower. These reductions could drive down the costs of ads across the internet, giving brands more licence to experiment with different channels.

But Meta and Google have, by far, the biggest potential audiences. Crafting a strategy around Pinterest and Snap and other niche platforms that aim to have similar impact is more complicated since they have a smaller reach. 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. One way to do that is to create compelling content across different apps.

“A real moat that brands can build is content distribution,” Fohr’s Nord said. “How do you get your brand story into all the nooks and crannies of the internet?”

What role will online marketplaces play in the digital ad shakeup?

In the last decade, online and offline retailers have built their own ad networks to incentivise 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 unauthorised sellers — Amazon’s ad revenue grew 18 percent to $40 billion in 2024. Brands are also buying ads on Target and Walmart, which saw online ad revenue rise 24 percent to $649 million and 32 percent to $3.9 billion in the US in 2024, respectively.

But marketplaces require brands to give up a cut of sales on top of paying for the ads. Meanwhile, Google only charges for cost per clicks when brands purchase ads on its search engine, said Katie Moro, global director of managed service at software firm Productsup, adding that brands have to ask themselves if they are “willing to sacrifice revenue for traffic?”

Still, the crackdown may also present an opportunity. A less powerful Google, for example, could push brands to use other ad buying vendors like The Trade Desk and StackAdapt, lessening their reliance on Google to purchase ads across the internet and freeing them from the tech giant’s unpredictable price increases, Belardi Wong’s Murphy said.

Ultimately, the potential shifts in digital advertising will push brands to streamline their strategies and “make conscious, educated decisions,” Moro said.

“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,” she added.