Big 4 control 64% of global internet ad market; Google is largest media owner-ZenithOptimedia report

MUMBAI: Despite the apparent low barriers to entry, the internet ad market is highly polarised and just four companies control 64 per cent of all global expenditure. The four internet media owners -Facebook, Google, Microsoft and Yahoo! generated $49.2 billion in revenue from internet advertising in 2011, out of the total $77 billion spent on internet advertising around the world.

Google alone accounted for 49 per cent of the world‘s internet ad expenditure, while Yahoo! in 15th position accounted for six per cent and Microsoft and Facebook at 26th and 27th positions respectively accounted for four per cent each.

Google‘s media revenues of $37.9 billion made it the world‘s largest media owner according to ZenithOptimedia‘s Top Thirty Global Media Owners report. The search and digital advertising giant moved up from second position and now boasts media revenues that are 39 per cent higher than its nearest competitor DirecTV.

News Corp, Disney, Comcast, CBS and BSkyB also made the list, while a notable exception, Twitter, with revenues of $140 million failed to make it to this group for the period of the report.

The Top Thirty Global Media Owners report is a ranking of the world‘s largest media companies by media revenue as estimated by ZenithOptimedia. The latest report covers financial year 2011. The Top Thirty Global Media Owners report was launched in 2007 and was last published by ZenithOptimedia in 2010. ZenithOptimedia defines media revenue as all revenue deriving from businesses that support advertising, not just the ad revenue itself.

Despite the rise of digital media, the majority of media revenues were generated by traditional media and entertainment companies that create and distribute content. Of the Top Thirty global media owners, 22 were companies whose main business is to attract audiences with strong content, which remains fundamental to generating media revenues. Six of the top 10 media owners during the period were content producers, including third-placed News Corp and fourth-placed Disney. Between them, these 22 generated $169 billion in media revenue in 2011, or 61 per cent of the total generated by the Top Thirty.

Since the agency last published ranking in 2010, five companies have entered the ranks of the Top Thirty: Facebook, Microsoft, Globo, ProSiebenSat.1 and Sanoma. The entrance of Facebook and Microsoft demonstrates the growing dominance of internet advertising, which now accounts for 20 per cent of global ad expenditure. Facebook has spearheaded the explosive growth of social media advertising across the world, which is currently growing at about 28 per cent a year, while Microsoft has benefited from the slower but still rapid growth of paid search and traditional display, which are growing at about 13 per cent a year. 

Although China is now the third largest ad market, the Top Thirty ranking does not currently include any companies from China, where media ownership is highly fragmented. However, the report says that Baidu, China‘s leading search engine only just missed out on a place this time, and is a likely candidate for inclusion next year, while the national broadcaster CCTV won‘t be far behind.

ZenithOptimedia‘s Top Thirty ranking for 2011 includes four digital media owners, and it expects that there to be at least one more next year. It also expects more media owners from other rising markets to join the two Latin American media owners in the top thirty.

The driving force behind Google‘s success is its search algorithm, which has been by far the most successful at delivering search results that consumers want and monetising them through paid search advertising.

No other company has been able to compete effectively in each segment of the digital ad market. The agency estimates that Google attracts 15 per cent of global display advertising, including traditional display, online video and social media, supplementing its 82 per cent share of search.

With the launch of Windows 8, Microsoft‘s flagship operating system has become an advertising platform for the first time; the next couple of years will show what effect, if any, this will have on Microsoft‘s ranking.

For ZenithOptimedia‘s Top Thirty list click here

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