Wednesday, July 27, 2016

Is Facebook and Google's domination of media advertising really bad for digital entrepreneurs?

Just wanted to share an interesting article – ‘Beware of the big beasts as Facebook and Google squeeze rivals’  – by Gideon Spanier, head of media at Campaign magazine, for the London Evening Standard.

If you are a digital marketer, where do you advertise your product? Chances are Facebook, Google and Instagram take up the lion’s share of your budget.

The author is concerned that from a media point of view Facebook and Google completely dominate the online media and their internet advertising revenues increased by a combined $18 billion (£13.7 billion) last year. This figure is the same amount that the entire digital ad market grew globally, with the exception of China, where Facebook and Google are not active.

“Two companies generated growth equal to 100% or more of global digital advertising outside of China last year,” Brian Wieser, an analyst at Wall Street firm Pivotal Research, says. 

“Other media owners’ digital growth either came alongside Google’s as part of their ad network activities [through revenue-sharing] or displaced declines from other digital media owners.”
Both are set to grow at a faster rate than in 2015 and should add $23 billion in revenues between them this year, according to Wieser.

Facebook, still only a third of Google’s size, is catching up and has reinvented itself for what it calls a “mobile-feed” world of media consumption. Its messaging app, Messenger, hit one billion users this month, its photo-sharing app, Instagram, passed half a billion in June, and it keeps poaching senior staff from the ad industry.

Meanwhile. half of the world’s top 30 media owners saw their ad revenues fall last year, according to Zenith, the media-buying agency.

Robert Thomson, chief executive of Rupert Murdoch’s News Corporation, the owner of The Sun and The Times, complained that Facebook had changed its algorithm to “reduce, if not remove” news publishers’ stories in favour of other posts. 

Kath Viner, editor of The Guardian, which is about to post a loss of £173 million, attacked Facebook.
“Social media companies have become overwhelmingly powerful in determining what we read — and enormously profitable from the monetisation of other people’s work,” she warned.

The author points out that while in the explosion of the digital economy, we enjoy unprecedented limitless media choice as consumers, the power lies with a decreasing number of technology giants.

Whilst the traditional print and other media players are naturally worried about their diminishing market share, smaller advertisers and digital entrepreneurs have never had it so good.

There has never been a time in history when a small business owner could so quickly launch a product worldwide and go toe-to-toe with the big boys.

In the past, businesses had to rely on a scatter gun approach using the likes of the Yellow Pages, local news advertising or leaflet drops to drum up customers. In most cases, we never knew if any of these methods actually worked, as it was almost impossible to measure.

National media coverage was and still is hugely expensive and there is still no guarantee of measurable success. Looking at a newspaper, distributed freely in London, I can see glossy ad’s costing tens of thousands of pounds for big brands – Samsung, Hilton, Virgin and VW - however, these ad’s are increasing awareness rather than directly pulling in business.  

Smaller entrepreneurs cannot afford the luxury of placing a series of £25,000 ad’s in the hope of building a brand!

That’s where Google and Facebook comes to our rescue, giving us low-cost targeted advertising with accurate measurable results. Nimble, agile digital entrepreneurs can market any product online, and even compete with larger rivals, using internet platforms like Amazon, Google and Facebook.

Millions of people are now working from home or running home-based businesses, some part-time but others escaping the 9-5 rat race to join the digital economy.

If you would like to learn more about launching an online business, escaping the 9-5 or joining the digital revolution from the comfort of your home, click here.

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