Big Tech’s advertising challenges remain the same as competition will intensify

With Big Tech getting its fair share of scrutiny over the past few weeks, it seems likely that many of the challenges it faces aren’t going away anytime soon.

Of course, one of the common denominators in all of this is the ability of some companies to grow ad revenue at a time of great geopolitical and economic uncertainty, not to mention unprecedented competition.

It’s almost twenty years to the day since former Google CEO Eric Schmidt said advertising was “the last bastion of undetectable corporate spending.” Meanwhile, Silicon Valley’s Madison Avenue assault was spearheaded by Google and joined along the way by various players, most notably Facebook, creating a hugely lucrative advertising duopoly that has drawn both heckling and eyebrows from regulators and competitors alike .

But advertising and big tech have also made for uncomfortable but willing bedfellows. Advertising has also become the crack cocaine for many companies and platforms operating in the consumer space. Now, however, this over-reliance has exposed some of the fundamental flaws in their business models. Ultimately, it could also be fatal for some companies.

According to current forecasts by the global agency group Dentsu, digital advertising will grow again this year by up to 14.2 percent to USD 409.9 billion (EUR 410 billion). However, how that money is spent and who gets it is changing rapidly.

While Meta/Facebook and Google are still likely to rake in around $300 billion in ad revenue this year, according to some analysts, it’s clear they face increased competition on all fronts.

This competition comes from everywhere, including streaming services, digital audio providers, news publishers, and traditional broadcasters. It’s also coming from some of the industry’s sleeping giants.

Players like Amazon, Disney, Apple, Netflix and TikTok have been at the fore and have also run the gauntlet of the established duopoly.

It’s probably TikTok that’s keeping Meta CEO Mark Zuckerberg up at night. A direct challenge to Facebook and Instagram, and to a lesser extent Google-owned YouTube, TikTok’s rapid expansion has resulted in the creation of a company that will bring in around $11 billion in ad revenue this year. According to the research company eMarketer, this is expected to double by 2024.

But Zuckerberg and Google’s Sundar Pinchai will also need to keep tabs on some of the more established players in the digital world.

Amazon, for example, reported ad revenue of around $31 billion in 2021. Some analysts now believe it’s only a matter of time before it introduces an ad-supported membership tier for its Amazon Prime video offering, which has over 200 million subscribers across the globe available all over the world.

For its part, Apple is also seen as another serious contender to disrupt the digital advertising market. With sales of its hardware still accounting for the lion’s share of revenue, the company currently brings in around $4 billion in advertising revenue annually. While the company’s future advertising plans have yet to be revealed, many Apple watchers believe it has been paving the way for a full frontal assault on the advertising market for some time.

They point to its loyal user base with oodles of first-party data, its entry into the entertainment market with Apple+, and most importantly, its decision last year to change its App Tracking Transparency (ATT) capabilities to allow users to see other websites and can block apps from tracking them. Some analysts estimate that this could cost Facebook alone a staggering $12.8 billion this year.

Finally, there’s Microsoft, which is estimated to bring in between $10 billion and $12 billion a year from advertising for Bing, LinkedIn, and in-app games, a market that’s growing fast. The 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 the time. Whether it’s good or bad for consumers, however, remains to be seen.

A tough challenge

Publicis Dublin has launched a new advertising campaign for Heineken Ireland’s Island’s Edge stout brand.

Introduced in 2021, Stout is aimed at non-traditional stout drinkers in the 18-35 age group.

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 cheer

Tesco Ireland has launched its Christmas 2022 advertising campaign.
Dubbed ‘The Christmas Party’, the campaign is the retailer’s first Irish campaign in several years and carries the message that ‘in difficult times, joy is more important than ever’.

The new campaign by advertising agency BBH Dublin features views of the Cliffs of Moher, swimmers in Dublin’s Forty Foot and customers enjoying Christmas in the comfort of their own homes. Big Tech’s advertising challenges remain the same as competition will intensify

Fry Electronics Team

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