Digital Toll Roads

According to eMarketer, total worldwide digital ad spending will reach $455.30 billion this year. That’s a lot of dough and it’s expected to grow another 15% in 2022.

Here is the scary part, the big three in digital advertising – Google, Facebook, and Amazon collected the majority of all ad spending in the U.S. last year.

In dollar terms, that is over half of the projected $191 billion digital ads spend in the U.S. this year.

When you look at digital ad spending it only gets worse, the “triopoly” increased their share of the U.S. digital-ad market from 80% in 2019 to almost 90% in 2020, according to GroupM.

Here some mind weighty stats for you to ponder:

  • The combined market capitalization of Google, Facebook, & Amazon is $4.143 trillion.  For some context and perspective here, that’s larger than the annual GDP of countries like Germany ($3.78 trillion,) the United Kingdom ($2.64 trillion,) India, ($2.59 trillion,) & France, ($2.55 trillion.)
  • If Google, Facebook & Amazon were a country they would rank #4 in the world in terms of GDP.
  • Amazon’s share of the ENTIRE US e-commerce market in 2021 is expected to be 40.4%.
  • Amazon has over 150 million US Prime Subscribers in 202.
  • Facebook has 2.80 billion monthly active users in 2021, with 1.84 billion users visiting the social networking site on a daily basis.
  • Facebook reported Q1 2021 advertising sales of $25.439 billion – a 46% increase year-over-year.
  • In Q1 2021, Google (Alphabet is the holding company,) posted revenue of $55.31 billion, up 34% from a year earlier, and net profit more than doubled to $17.93 billion in the first quarter.
  • Google has been the market leader in online advertising for over a decade and is expected to command nearly 29% of global digital ad spending this year.
  • Google is the leading mobile search provider in the US, accounting for almost 93.22% of the market in Q1 2021.
  • There are over 70,000 Google searches every second – that’s 227 million per hour and about 5.4 billion Google searches per day.

Do you see the big (future) picture here?

(Note: I’ve sparred including Apple in the group to avoid pilling on the dramatics, but you’re catching this drift, right?)

So…

…if you have a business and need to sell something…

…have a business and need some “digital foot traffic”…

…have a business and want some attention…

you’ll have to pay up.

The online gatekeepers are here to stay, and they want your dough.

They own the media, the platforms, the attention, the data, the traffic, the commerce, the advertising…EVERYTHING.

The triopoly toll road is real.

B(AD) Benchmarks

According to eMarketer, 55.2% of all total digital ad spending will go to display advertising and 40.2% will go to search.

When you look into some of the benchmarks for click-through rates (CTR) for digital display advertising, you’ll find some troublesome numbers.

For instance, the median CTR for ads on the Google Display Network for Q1 2020 0.047%, which decreased 41% year over year when compared to Q1 2019.  (Note: Google no longer publishes this data…and perhaps it shouldn’t come as a surprise looking at these numbers!)

That’s 5 clicks per 1000 impressions folks.

Facebook news feed advertising benchmarks are only slightly better with a media CTR in Q1 2020 of 1.11%.

The moral of the story here is that you could make a lot of pizzas with the dough that is being wasted on digital advertising.

And as digital ad spend grows by double digits seemingly every year, the amount of cash being donated to the triopoly will only make the strong get stronger.

It’s a perpetual digital toll road that you have no choice but to take.

I’m a bit concerned about what this future looks like, are you?

But there is good news out there!

In the end, it all comes down to marketing (my favorite topic.)

The best marketer always wins.

Better yet, there are A LOT of bad marketers out there, so when you’re a half-decent one, you’ll stand out and get the job done.

It’s just getting harder to sort out the online cesspool of marketing information and self-proclaimed experts out there.

For clues on what to do next, look back in history before the internet and triopoly came to be, and learn what the old direct response marketers did to earn attention (when they had to create their own.)

It’s coming full circle, and that’s why I’m spending my time studying the masters who came much before the digital marketing cacophony that exists today.

There’s gold in them their hills!”

Stay thirsty for knowledge my friends…

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