Internet advertizing (world market)

2020: Google and Facebook forced to share advertizing revenue with suppliers of content

On April 20, 2020 it became known of the decision of the authorities of Australia to oblige Facebook and Google to share advertizing revenue with local media. This country of one of the first obliged digital platforms to pay for content which they use.

The mechanism of collecting of assignments was developed by the Australian commission on questions of the competition and consumer protection (ACCC): the code of behavior which introduces the rules obliging Facebook, Google and other companies to do contributions to advantage of representatives of the press if they use their content is created.

The authorities of Australia decided to force Google and Facebook to share income

It is supposed that the code will regulate the sphere of data exchange, a condition of moderating of news and formation of ratings and also an order of monetization and sharing of the income got from the publication of news. Besides, he will install dispute resolution mechanisms between subjects of the market and will prescribe punishments for non-execution of agreements.

The chief treasurer of Australia Josh Frydenberg said that the government took this step after unsuccessful negotiations with Facebook and Google on rules of payment of content and control of advertizing. Difficult fight against the large companies, but as is staked much, the government is ready to this fight is necessary to treasury, he emphasized.

On a fundamental question of payment of content which could be solved using development of the voluntary code the significant progress was not reached, –  Reuters quotes  the comment of the official given to one of the Australian media.

By April, 2020 the authorities of Australia did not call a share in advertizing revenue which the Internet companies will have to give media for use of their content.^[1]

The amount of the Australian market of Internet advertizing in 2019 was about 9 billion Australian dollars (about $5.72 billion), having increased more than by 8 times in comparison with 2005.

2019: Rise of Internet advertizing to $332 billion

2017: Forecast of Zenith

World expenses on Internet advertizing will grow by 13% to $205 billion in 2017. On this segment 36.9% of all advertizing budgets – in comparison with 34% in 2016 is necessary. In the current year for the first time for Internet advertizing it will be spent more, than for traditional TV commercial ($192 billion), said in the report of Zenith (March, 2017).

2016

Data of Zenith

However, growth rates of a segment of Internet advertizing slow down. In 2016 growth was 17% in comparison with 20% in 2015, the following annual indicator is predicted at the level of 13%, and in 2018 and 2019 – 12% and 10% respectively. But in money expenses will still increase by $23-24 billion annually.

Since 2011 the world advertizing market grew at steady rates for 4-5% a year, and the agency expects that growth will continue till 2019. The forecast for 2017 – 4.4% (is a little lower in comparison with 2016 – 4.6%), same for 2018, and 4.2% - on the 2019th. These values are a little lower, than the IMF predicts for nominal GDP.

Google and Facebook receive nearly 50% of the total costs of online advertizing

Outside China 72% of all revenue of online advertizing divide Google and Facebook. Also these companies got 90% of revenue of new advertisers of 2016. In 2018 nearly a half of all size of the market of Digital Signage estimated at $270 billion will fall to the share of two technical giants from Silicon Valley, reported Reuters in December, 2016.

The share of Facebook, according to forecasts, in 2018 will reach 16% and will grow while Google can concede slightly a share in 31% of the market of advertizing, consider in eMarketer.

Facebook will increase the share in advertizing pie of the USA thanks to the opportunities of targeting of audience which allow advertisers to receive direct contact with users of social network, analysts consider.

Facebook also learned to monetize the mobile audience successfully: it generates the companies about 78% of all advertizing revenue. eMarketer predicts that in 2017 its share at Facebook will grow to 85%. It will be promoted also by the services purchased by Facebook like Instagram. Also eMarketer predicts that thanks to Instagram the social network will increase the share in the market of banner advertizing.

Even the Chinese large companies, like Alibaba and Baidu, try to catch up and distillate Zuckerberg due to the local large market. Earlier large players like Altaba (before Yahoo) and AOL occupy less than 2% of the market. This indicator probably sets Verizon Communications thinking: and whether it is worth being spent on around unprofitable Yahoo!?

2015: Forecast: the media advertizing will bypass context on volume

In 2015 world expenses of advertisers on media advertizing on the Internet will exceed expenses on contextual advertizing, follows from the report of the advertizing ZenithOptimedia group (June, 2015). $66.2 billion, and on context – $62.5 billion will be spent for media advertizing. In 2014 the contextual advertizing dominated: advertisers spent $55.6 billion for it, and on media – $53.9 billion^[2].

According to ZenithOptimedia, in general the Internet will remain to the most fast-growing media in the next three years. This market will grow on average for 15% a year till 2017 inclusive. Whereas, for example, among traditional media advertizing has the greatest growth rates at movie theaters – only 4% a year.

In the Internet market the media advertizing – on average for 17% a year till 2017 inclusive will grow most quicker. ZenithOptimedia understands traditional banner advertizing, online video and advertizing as media advertizing on social networks. The media advertizing becomes more and more interactive that does it more attractive to advertisers, experts of group explain. And development of technologies of automatic purchases of advertizing allows to target more effectively advertizing messages on the necessary audience. Besides, advertizing agencies develop analytical tools which give the chance more precisely to measure influence of advertizing on users and to keep track of their activity on different types of devices – the PC, smartphones and tablets, the report says.

ZenithOptimedia notes that video advertizing becomes the driver of growth of the market of media advertizing: this market will grow for 29% a year till 2017 Videoreklama even more often is on sale now using the systems of automatic purchases of advertizing, said in the report of group. And many TV companies began to sell actively in one packet rollers on air and video advertizing in network. At last, video advertizing improvement of quality of screens of smartphones, increase in their sizes and also improvement of communication quality does well. Users watch video content in network more and more and, therefore, browse video advertizing more often.

Due to transition of users to mobile devices also the advertizing segment grows in social networks (+25% a year till 2017 inclusive), the report says.

ZenithOptimedia does not explain why the contextual advertizing loses on growth to media advertizing. According to the forecast of group, expenses of advertisers on promotion will grow searching on average for 12% a year. According to Interactive Advertising Bureau (IAB), the contextual advertizing on desktop computers from 2006 to 2014 was the most popular format among advertisers who promoted the services and goods in network. Its share in their Internet budgets reached a maximum in 2009 and 2011 – about 46%. In 2014 its share decreased to 38%. The share of mobile advertizing (both media, and context) grew from 5% in 2010 to 25% in 2014.

The media advertizing grows at the expense of video, social networks, automatic purchases, but not thanks to traditional banners, the managing director of Dentsu Aegis Network Maxim Osipov says. The market of contextual declarations increased first of all due to inflow of new advertisers in recent years, now such advertisers are almost selected from the developed countries, he argues, now the market will grow only with growth of budgets therefore the intensive growth of this segment will not be any more. In Russia this market did not reach saturation yet and will continue to grow at higher rates, than media advertizing, he is sure.

According to the Association of the Communication Agencies of Russia (ACAR), in 2014 the market of contextual advertizing grew by 27% up to 65.5 billion rubles, the market of media advertizing dropped by 5% up to 19.1%. Falling of the market happened first of all at the expense of banners, the market of video advertizing grew by 10%.

You See Also

• Internet advertizing (market of Russia)
• Video advertizing on the Internet (the market of Russia)
• Internet advertizing (market of the USA)
• Internet advertizing (market of the countries of Europe)

Notes