Google, Facebook, Amazon Are the New NBC, ABC and CBS

Last week the IAB released its full year 2018 US digital ad revenue report. The headline was: digital advertising crosses $100 billion threshold — $107.5 billion to be precise. The bulk of that revenue (75%) is concentrated in the “top 10 leading ad-selling companies.” The IAB doesn’t name them but it’s basically Google, Facebook and Amazon, followed by Microsoft, Yahoo/Verizon, Twitter, Snap, Yelp and a few others in the programmatic ecosystem. This top-10 concentration grew 3% from last year. Comparison of ad revenues by format (2017 v. 2018) 

If you’ve listened to any of Google’s earnings calls, what’ve they’ve said for many quarters is that their growth is coming from mobile and video. This is mirrored in the larger industry. According to the IAB report:

This full-year 2018 total represents a 22 percent year-over year increase from $88.3 billion in 2017. Mobile and video continue to lead digital marketing’s steady growth. Accounting for nearly two-thirds (65%) of 2018’s internet ad revenues, mobile reached $69.9 billion, up 40 percent from the previous year at $50.1 billion. Advertising revenues from digital video saw the largest rise among all formats—an uptick of 37 percent—catapulting to $16.3 billion in 2018 from $11.9 billion in 2017.

(Emphasis added.) Advertising on the desktop appears to have peaked in 2015 at roughly $39 billion and came in at $37.6 billion for full-year 2018. Mobile (all formats) grew 39.7% from 2017 to 2018. Mobile ad surpassed desktop revenue in 2016. The desktop will likely continue be flat-to-declining going forward.

Desktop vs. mobile digital ad revenue (US) 

Search continued to be the largest spending category ($48 vs. $40 billion), growing in real-dollar terms but declining slightly in percentage terms vs. last year (45% vs. 46%). Social media generated about $29 billion in ad revenue in 2018 (30.6% growth vs. 2017). The IAB notes however the growth of social has been slowing: “Social continues to out-pace the overall industry, however growth has been slowing and is well below the 46.6% compound annual growth rate of social from 2012 to 2018.” According to multiple SMB surveys over the past two years, social media is either the first or second marketing channel priority depending on the survey. This year, digital ad revenue is expected to exceed the value of traditional media for the first time, according to eMarketer estimates. (They also said that last year.) However, data in the IAB report argues traditional media, lead by TV, will hold on for at least a year or two more. Share of ad spending by media As the data reflect, the growth of digital ad revenue will slow in the next several years. However, there are some wild card variables that may specifically impact growth: regulation and the impact of 5G, for example. The latter will take longer to roll out and impact internet advertising than people believe (e.g., think more video consumption on mobile). However, when it kicks in there could be a major impact on online commerce and advertising. Regulation could also significantly affect the third party data ecosystem and reinforce the existing first party data advantages of the large players — benefitting some and disadvantaging others. As the baton has passed from traditional mass media to digital, Google, Facebook and Amazon have assumed the positions once occupied by NBC, ABC and CBS in the pre-cable days of TV.

https://www.businesscreatorplus.com/google-facebook-amazon-are-the-new-nbc-abc-and-cbs/