Editors' pick: Originally published Jan. 22.

For years, Facebook (FB) - Get Facebook, Inc. Class A Report and Alphabet's (GOOG) - Get Alphabet Inc. Class C Report (GOOGL) - Get Alphabet Inc. Class A Report Google have ruled the digital ad landscape, with others lagging far behind. What explains their continued dominance?

One simple word -- innovation.

In a research note to clients on Friday, Cantor Fitzgerald analyst Youssef Squali said that both Menlo Park, Calif.-based Facebook and Mountain View, Calif.-based Google are outworking and out-innovating others in the ad space, helping to drive ad dollars toward them.

"The pace of innovation is high at both companies, with Google opening up Real-Time Ads to more brands, and Facebook extending its Lead Ads format to the desktop this week," Squali wrote.

Squali has buy ratings on both names and $130 and $880 price targets on Facebook and Alphabet, respectively.

Just this past week, Facebook has introduced Sports Stadium, a place where sports fans can interact with each other, as well as bringing Lead Ads, which lets users fill out lead cards with their Facebook information, to desktop. Meanwhile, Google continues to make Real-Time Ads -- which allow advertisers to run campaigns on YouTube and hundreds of thousands of apps and sites in the Google Display Network -- available to more clients.

These announcements follow several other initiatives laid out by both firms in recent weeks, including such high-profile ones as Facebook integratingUber into Messenger, the integration of Facebook (as well as Twitter (TWTR) - Get Twitter, Inc. Report ) data into Nielsen ratings, the Instagram Partner Program that lets advertisers find the top technology experts to help their businesses use Instagram to grow, continued improvements YouTube is making, and countless others.

Jim Cramer of Action Alerts PLUS, which owns Facebook stock, said, "Facebook is clearly ahead of the game in communication and remains the lead innovator in today's market."

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Analysts surveyed by Thomson Reuters expect Facebook to earn 68 cents a share on $5.368 billion in revenue when it reports Jan. 27, while Alphabet is expected to earn $8.10 a share on $20.78 billion in sales, including traffic acquisition costs. Alphabet reports its quarterly earnings on Feb 1.

In addition to the innovation coming from both companies, the gargantuan size and scale of both Facebook and Google have helped advertisers attain incredible reach. At the end of the third quarter last year, Facebook had 1.55 billion monthly active users, including over 1 billion on mobile.

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The core Google search product had nearly 90% of worldwide search market as of October 2015, according to Statista. And YouTube, Android, Maps, Chrome and YouTube each had over a billion users as of the end of the third quarter.

The size and scope of both firms have helped drive revenue. Marketing software firm Kenshoo noted that social networking advertising spending increased 50% year over year in the fourth quarter, aided by Facebook's carousel ads and ramped-up advertising at Facebook-owned Instagram. Additionally, video saw 12% of advertising spending, as Facebook's video efforts continue to explode.

Alphabet's social efforts have largely been derailed, thanks to a failed Google+ project. Google+ was redesigned in November 2015 in a further attempt to gain traction.

But paid search continues to be extraordinarily lucrative. According to Kenshoo, paid search dollars for Alphabet grew 8% year over year in the fourth quarter, with mobile seeing 74% growth. Search clicks grew 32% year over year, while cost per click declined 19% over the same time frame, according to the research firm.

In 2016, research firm eMarketer forecasts digital display ad spending will actually surpass search ad spending, with display accounting for $32.2 billion in U.S. ad spending, compared to $29.2 billion for search ads. The total digital ad market is forecast to be $67.1 billion, with display and search accounting for 92% of that.

Facebook is likely to be a huge beneficiary of increased digital ad spending, thanks to banner ads, video and particularly its efforts on mobile. In the third quarter, Facebook generated 78% of its $4.3 billion in advertising revenue from mobile. By contrast, Alphabet's Google has not previously disclosed how much revenue is generated from mobile, though it is changing its reporting structure because of the Alphabet reorganization.