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Hi I'm Steve and I just spent an hour on a weekend falling down a rabbit hole researching advertising conglomerates. Here's what I learned.
The "big four" ad agencies of the world do ~$10B revenue/year, whereas Google now does $100B+ ad rev/year. Scary, right? You have no idea.
The "big four" ad agencies of the world do ~$10B revenue/year, whereas Google now does $100B+ ad rev/year. Scary, right? You have no idea.
What Google and Facebook each did was combine ad agencies AND all forms of media (newspaper, TV, anything that grabbed people's attention and held it) into ONE HORRIBLE MACHINE and I now more fully appreciate what a huge sea change that is for global culture.
Just to be ultra-clear, having an industry-level distinction between the companies that buy attention and the companies that sell attention is a thing that actually made it possible for traditional media companies to gain some semblance of public trust and keep their eyeballs.
But now instead of maintaining that distinction and thus needing to maintain public trust, Facebook, for example, is working around the need for our trust by purposefully designing addicting feeds. We don't trust them but we keep scrolling.
Google does this, except instead of using addicting feeds as their tool of choice, they continuously lower the bar of entry for all kinds of information, making it comparatively inefficient to look anywhere else for answers you need to any kind of query.
People are rightfully distrustful of companies paying to pusuade them with ads, yet ads work. The tension of trust vs. ads will always exist.
Are there other work-arounds for trust-maintainance vs ad-selling tension within unified media-company/ad-agencies like Google/Facebook?
Are there other work-arounds for trust-maintainance vs ad-selling tension within unified media-company/ad-agencies like Google/Facebook?
If there are, they will be the next online advertising giants.
Think about how Amazon does this. What about Instagram?
Each has unique facets of the way they integrate into our social lives, deliver physical services, capture our attention, and show us ads.
Think about how Amazon does this. What about Instagram?
Each has unique facets of the way they integrate into our social lives, deliver physical services, capture our attention, and show us ads.
Even in 2018 people report that the most trusted ad type is still "recommendations from people I know" - so what if someone built an online and offline service that showed you ads in a way you inherently trust AND captured your attention in a way you enjoy? It's a $600B market.
Now is officially the time to be ~freaked out~ if you aren't paying attention to both how you consume and produce advertising AND media in your business, job, and life in general.
Those who are integrating these two industries know the world is theirs, and that should scare you.
Those who are integrating these two industries know the world is theirs, and that should scare you.
It's not the $600B market (not that big compared to GDP) that should impress upon you the importance of this insight.
The perverseness of combining media and advertising is captured in this figure:
Americans spend 10 hours/day consuming media, and some years it goes up an HOUR.
The perverseness of combining media and advertising is captured in this figure:
Americans spend 10 hours/day consuming media, and some years it goes up an HOUR.
Sources for the previous tweet: http://www.adweek.com/tv-video/us-adults-consume-entire-hour-more-media-day-they-did-just-last-year-172218/, https://www.recode.net/2017/5/30/15712660/media-consumption-zenith-mobile-internet-tv
Now, while the total addressable market of the ad industry is not that impressive, the fact that advertising is estimated to have generated nearly a FIFTH of our actual GDP *very* important.
Now, while the total addressable market of the ad industry is not that impressive, the fact that advertising is estimated to have generated nearly a FIFTH of our actual GDP *very* important.
Why? Because it underscores the importance of advertising - the entire industry has a nearly 20-to-1 ROI.
$200b of US ad spend generates $3.6T in economic activity. http://www.adweek.com/brand-marketing/study-ad-industry-contributed-nearly-20-percent-toward-us-gdp-2014-168164/
$200b of US ad spend generates $3.6T in economic activity. http://www.adweek.com/brand-marketing/study-ad-industry-contributed-nearly-20-percent-toward-us-gdp-2014-168164/
So to recap: What power do Google and Facebook now wield by dominating both the global media AND advertising landscape as combined parts of their bottom line? Aren't these just niche creative industries, not really a big deal?
Simple: These companies (to include all tech companies, Apple, Amazon, etc.) have secured 70% of our waking time, and are directly generating 20% of our economic participation. They're incentivized to hack their way into more and more of it, and they're making steady progress.
I think I've made my point. All that's left to do is thank you for scrolling through your feed reading these tweets, as painfully ironic as that is.
Please make the effort to ensure you're carefully and purposefully deciding how you spend your time, and the rest falls into place
Please make the effort to ensure you're carefully and purposefully deciding how you spend your time, and the rest falls into place
