This article was updated April 6, 2018, and originally published Aug. 15, 2017.

It's no secret that people don't watch as much TV as they used to. Millennials, in particular, are leading the way when it comes to cord-cutting and watching less broadcast television in favor of streaming services like Netflix (NFLX -0.79%) and Hulu.

You might think the biggest beneficiary of the trend is Netflix. As more people eschew traditional television for streaming services, the leader in the category stands to gain. But there's an entirely different industry that stands to gain billions of dollars in revenue as a result of people watching less television: internet advertising. Two companies in particular -- Facebook (META -2.70%) and Alphabet (GOOG -0.28%) (GOOGL -0.27%) -- stand to benefit the most.

A couple lounging on a couch with a laptop on the coffee table.

Image source: Getty Images.

The opportunity is massive

Advertisers will spend $69.9 billion on television ads in the United States in 2018, according to eMarketer. But as people spend less time watching TV (and the commercials that are broadcast alongside programming), that number will start to fall.

eMarketer expects U.S. TV ad spending to fall to $69.2 billion in 2019 before bouncing back slightly in 2020 due to the Olympics and presidential election coverage. That decline in ad spending is more than made up for by the increase in digital advertising, which eMarketer expects to climb 18.7% this year to $107.3 billion, and reach $142.2 billion by 2020.

Facebook COO Sheryl Sandberg is fond of saying that ad dollars will follow eyeballs. So, as eyeballs continue to shift to their owners' phones and computer screens, so will the ad budgets. The other options for advertising -- print media, radio, etc. -- couldn't possibly take on tens of billions in new ad dollars.

But total users and time spent on Facebook, YouTube, Instagram, and other apps continues to climb. YouTube boasts more than 1.5 billion viewers watching over an hour per day on average. Instagram just announced that its youngest users spend over half an hour per day in the app on average. Meanwhile, television viewing among 12- to 24-year-olds was down nearly 50% from the first quarter of 2011 to the first quarter of 2017.

Data source: analysis of Nielsen data. Graph source: Author.

To be sure, people still spend a ton of time watching television. Even young people spend over 13 hours per week in front of the TV. So, it's not like television advertising is just going to disappear. Likewise, print and radio advertising still bring in billions of ad dollars. Still, the only medium really growing is the internet.

Facebook and Google are the biggest beneficiaries

If you believe the cord-cutting trend will continue and ad budgets will shift to digital advertising, you ought to own shares of Alphabet or Facebook. The two combined to take nearly all of the growth in digital advertising during 2016. The two may see their share of digital ad spending growth fall over the next few years, but they'll still take the lion's share of the market.

Google is benefiting from the growth of mobile, as its search engine is even more dominant on mobile than on desktop. It's also benefiting from the increasing popularity of YouTube, which provides an excellent replacement for television ads. In fact, Google is investing in more quality content to attract television advertisers.

Facebook, likewise, is investing in its own video content in an effort to attract those TV ad dollars. It's also been able to grow engagement on Instagram with the introduction of Instagram Stories, and it's only just started showing ads on Messenger.

But the biggest reason Google and Facebook win nearly every new ad dollar that flows to digital is because they offer unparalleled reach. Television advertisers are interested in reaching as many people as possible with their messages. Nobody else can offer the same reach as Facebook and Google. As Sandberg says, Facebook has "a Super Bowl on mobile every day."

As more ad dollars follow the eyeballs from television to digital, Facebook and Google will surely see the vast majority of that revenue. Streaming services like Netflix will benefit from the desire for video entertainment, but they don't provide a home for those ad dollars, which present a much bigger revenue opportunity than $10-per-month subscriptions.

Even if Netflix grew its global subscribers by 150 million, that represents just $18 billion in total revenue at $10 per month. The U.S. digital ad market alone could increase by twice as much over the next five years as ad budgets shift to digital.

That's why Facebook and Google stand to benefit more than Netflix from the decline in TV viewership.