With Big Tech coming in for its fair share of scrutiny over the last few weeks, it seems likely that many of the challenges it faces are not going to go away any time soon.
ne of the common denominators in all of this, of course, is the ability of some firms to grow advertising revenues at a time of great geopolitical and economic uncertainty, never mind unprecedented levels of competition.
It’s almost twenty years ago to the day that the former Google CEO Eric Schmidt said that advertising was “the last bastion of unaccountable corporate spending”. In the intervening period, Silicon Valley’s assault on Madison Avenue has been led by Google and joined along the way by various players most notably Facebook. Between the two, they were able to carve out a highly lucrative advertising duopoly that has raised both heckles and eyebrows from regulators and competitors.
But advertising and Big Tech have also made for uncomfortable yet willing bedfellows. Advertising also became the crack cocaine for many firms and platforms operating in the consumer space. Now, however, this over-dependence has exposed some of the fundamental flaws in their business models. Ultimately, it could also be the undoing of some firms.
According to recent forecasts from the global agency group Dentsu, digital advertising will continue to grow again this year by as much as 14.2pc to $409.9bn (€410bn). How this money is being spent and who is getting it, however, is changing rapidly.
While Meta/Facebook and Google are still likely to pull in around $300bn in advertising revenues this year according to some analysts, it is clear they are facing increased competition on all fronts.
This competition is coming from everywhere including the streaming services, digital audio providers, news publishers and traditional broadcasters. It’s also coming from some of the sleeping giants of the industry.
Players like Amazon, Disney, Apple, Netflix and TikTok have been to the fore and they have also thrown down the gauntlet to the established duopoly.
Probably the one that keeps Meta CEO Mark Zuckerberg awake at night is TikTok. A direct challenge to Facebook and Instagram, and to a lesser extent the Google-owned YouTube, TikTok’s rapid expansion has led to the creation of a business that will suck in around $11bn in advertising revenues this year. This is set to double by 2024, according to the research firm eMarketer.
But Zuckerberg and Google’s Sundar Pinchai will also need to keep their eyes on some of the more established players in the digital world.
Amazon, for example, reported advertising revenues of around $31bn in 2021. Some analysts now believe it’s only a matter of time before it introduces an advertising-supported membership tier for its Amazon Prime video offering which is available to over 200m subscribers around the world.
For its part, Apple is also viewed as another serious contender to shake up the digital advertising market. With sales of its hardware still accounting for the lion’s share of revenues, it is currently bringing in around $4bn a year in advertising. While the company’s future advertising plans have yet to be unveiled, many Apple watchers believe it has been paving the way for a full frontal assault on the advertising market for some time now.
They point to its loyal user base with oodles of first party data, its moves into the entertainment market with Apple+ and, most of all, its decision last year to change its app tracking transparency (ATT) features to allow users block other websites and apps from tracking them. Some analysts estimate that this could cost Facebook alone a staggering $12.8bn this year.
Finally, there’s Microsoft which is estimated to be bringing in between $10bn-12bn from advertising a year from the likes of Bing, LinkedIn and in-app game advertising, a market which is growing rapidly. Its deal to sell Netflix’s advertising inventory will also give it a bird’s eye view of a rapidly changing market.
All of this points to an emerging new world order for digital publishers and platforms. And about time. Whether it’s good or bad for consumers, however, remains to be seen.
A stout challenge
Publicis Dublin has rolled out a new advertising campaign for the Heineken Ireland-owned stout brand Island’s Edge.
Launched in 2021, the stout is aimed at non traditional stout drinkers in the 18-35 age bracket.
The new campaign is called “It’s better, less bitter,” and celebrates those who “choose optimism over bitterness in their lives.”
It will run across TV, radio, social and out-of-home.
Tesco’s Christmas joy
Tesco Ireland has launched its Christmas 2022 advertising campaign.
Called ‘The Christmas Party’, the campaign is the retailer’s first Irish campaign for a number of yearsm and comes with the message that “when times are tough, joy matters more than ever”.
Created by the advertising agency BBH Dublin, the new campaign features views of the Cliffs of Moher, swimmers in the Forty Foot in Dublin and customers enjoying Christmas in their own homes.
