Jun 27, 2017

Tech giants eating the advertising world

In the new media world, five companies are crushing everyone else. This year, two-thirds of all global ad dollars will go to the Big Five: Google, Facebook, Tencent, Baidu and Alibaba, according to the latest PriceWaterhouseCoopers Entertainment and Media Global Outlook.

Data: eMarketer, Note: Google includes YouTube, Microsoft includes LinkedIn; Chart: Andrew Witherspoon / Axios
  • Roughly 50% percent of ad dollars flow to to Google and Facebook, America's "Duopoly." Together they are expected to take 83% of every new ad dollar, according to calculations from Digital Content Next, the premium publishers association.
  • Three companies in China — Alibaba, Baidu and Tencent — control over 60% of the Chinese ad market and now account for 15% of all global advertising.

These numbers are mind-boggling:

  • Google's ad revenue is roughly the same as all print ad revenue globally and Facebook's ad revenue nearly topples all radio ad revenue globally
  • The 12 companies behind the Big Five — Yahoo! Microsoft, Linkedin, IAC, Verizon, Amazon, Pandora, Twitter, Yelp, Snapchat, Sina and Sohu — bring in roughly half of what Google brings in annually in ad revenue.

Why it matters: The absence of regulation to curb the dominance of some of these tech giants has forever changed how people consume news AND ads, and the strong keep getting stronger. Some Trump White House officials such as Steve Bannon fantasize about clamping down on the tech darlings but we see no signs they will act anytime soon.

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