Google and social media giant Facebook have agreed to a multi-year deal worth $1.8 billion, which gives the two tech giants access to some of the biggest advertising budgets on the planet.
The deal could save advertisers billions of dollars in advertising expenses in the coming years, but it also comes with a caveat: It’s also the first time Google has offered advertisers the ability to directly monetize ads on its own platform.
Google has said it expects to see an increase in spending on the platform, as more advertisers use it to promote their products, including Google search, YouTube and more.
Google and Facebook declined to comment on the deal.
Under the deal, Google will be able to direct its ad revenue toward ad targeting, and Facebook will be allowed to use some of that ad revenue to pay for ads on Google products.
Google and the two companies have been locked in a decades-long war over how much and how often to pay companies to display their ads on the Internet giant’s platform.
Facebook said in July that it plans to spend $1 billion a year on advertising on its platforms for the next five years, while Google will spend $400 million per year for the same period.
The agreement would provide both companies with $2.6 billion each in revenue, according to The Wall Street Journal.
Facebook and Google declined to discuss the terms of the deal when contacted by Recode.
Facebook’s share price jumped 5.5% to $66.04 on Thursday.
Google, however, has been pushing back on the notion that the deal is a sign of growth.
In a blog post earlier this month, Google said it was already spending $3 billion a month on advertising and marketing in the United States and Europe, up from $1-2 billion a day last year.
The company is also spending $1 trillion on digital media, the blog post noted.
Google will continue to use its platform to build products and services that are more relevant to consumers, such as advertising and search, and will continue working to build out a product for Google+ that helps users find relevant content and services.
The two companies are also working to streamline their advertising operations.
Google will invest $200 million over the next year to help improve its digital advertising technology, and the company is expanding its partnerships with brands and advertisers, the company said.