Power in the digital advertising market is concentrated in the hands of a few large platforms, and is becoming even more concentrated. The five purely digital media owners — Google, Facebook, Baidu, Yahoo and Microsoft — generated $71 billion in media revenue, which represents 68% of all global digital ad spend, up from 67% a year ago, according to a just-issued report from ZenithOptimedia, part of Publicis Groupe.
Google’s dominance as the world’s largest media owner has increased, with the gap between it and its nearest competitor widening significantly over the past year. Google's grip on the market means it is now 136% bigger than the second-largest media owner (Disney), up from 115% a year earlier. It is also bigger than the second-largest and third-largest (Comcast) combined.
Google's reign is largely attributed to rising sales of smartphones and tablets. These devices have helped to strengthen Google's central search function, which is useful for shoppers looking for price comparison and allows consumers to view content at times and places most convenient for them. Mobility has also created new opportunities to target them with display ads, another important component of Google’s business.
And although Google has profited from the shift toward mobile advertising, another beneficiary of this transition to mobile has been Facebook, which is the fastest-growing of the top 30 media owners identified in the ZO report — “Top Thirty Global Media Owners 2015” — and the 10th-largest media owner.
Facebook’s media revenues grew 63% over the past year. This growth is aided by the fact that Facebook has actively embraced mobile technology in order to encourage its users to visit it regularly and frequently throughout the day, says ZO. Ads are designed to blend seamlessly into the content feed.
China’s equivalent to Google, Baidu, is another rapidly growing company cited in the report — up 43% over the past year. Thanks to the rapid development of China’s ad market, as well as improvements in search technology, Baidu ranks 14th, ahead of Yahoo (18th) and Microsoft (21st).
Grupo Globo, Brazil’s principal media owner, saw media revenues grow 15% year-on-year, helping to make it the third fast-growing media company. Like Baidu, Globo has benefited from its presence in a fast-growing emerging ad market, but Brazil’s recent economic difficulties are likely to limit further growth in the short term.
ZO named CCTV: China’s national state television company as another entity to watch, since it accounts for about a quarter of China’s television ad market — the third-largest in the world. This region's advertising has more than tripled in size over the past decade, though Chinese television is now facing stiff competition for ad budgets from online video and digital media in general. That said, even though it is backed by the government, CCTV is likely to diversify since its dominance will make it tough to increase its revenues from its core business, says ZO.
“The rapid growth of digital media and emerging ad markets has strengthened the position of media owners, such as Google, Facebook, Baidu and Globo, at the expense of traditional media owners in developed markets,” said Jonathan Barnard, ZenithOptimedia’s head of forecasting. “The top digital media owners currently maintain a strong grip on the digital ad market, but they face the constant threat of displacement by disruptive innovators. While some emerging-market media owners face challenges in expanding their businesses in the short term, we expect to see more media owners from emerging markets enter the top 30 over the next few years.”
This report's ranking of the world's largest media companies by media revenue was launched in 2007 and was last published by ZenithOptimedia in 2014. ZenithOptimedia defines media revenue as all revenues deriving from businesses that support advertising — television broadcasting, newspaper publishing, internet search, social media, and other channels. This includes not only advertising revenues but also other revenues generated by these businesses, such as circulation revenues for newspapers or magazines.
However, in a change from previous editions, ZO tightened the definition of media revenues to exclude simple redistribution of third-party content. This means, for example that for pay-TV providers only revenues from content in which they sell advertising are counted in ZO’s tally.