The ad industry has never been bigger. Companies around the world today spend more than a trillion dollars annually on “commercial communication.” The profits of five of the six most
valuable companies in the world today -- Alphabet/Google, Amazon, Meta, Microsoft, Apple -- are funded entirely or significantly by advertising. And more people see more ads more often today than ever
before.
However, most of the companies that dominated advertising and media at the turn of the century, such as newspapers, magazines, yellow pages, radio and television companies, are in
disarray, are contracting, or are gone.
Analysts and press politely say that the industry is “consolidating.” I say the polite euphemism doesn’t do justice to what's
happening.
No, today the ad industry as we know it has entered its “spiders in a jar” phase, when, like spiders, they kill each other until there is only one left.
The five
largest marketing services holding companies, whose collective market capitalizations are now smaller than a single demand-side platform, are publicly attacking each other's numbers, business models
and practices (not that this is a new behavior; we had years of entertainment watching Sir Martin and John Wren trade barbs).
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The “open web” has become a site of open warfare, as
DSPs publicly attack SSPs for “hidden fees” and promulgating fraudulent inventory, while the largest agency company is attacking a large “transparent” DSP for its lack of
transparency.
And for the large national and local television companies, the question is not who will survive their debt loads, but who will survive longer and better leverage the likely
bankruptcies that will follow when creditors take over control from equity holders -- each TV company hoping to emerge from the process more like Delta Airlines than General Motors.
I
understand why some might see this period as one of industry consolidation. I fear that it's more likely to look like “spiders in a jar.”