Report: Three of world’s biggest brands are online advertising companies
The BrandZ Top 100 Global Brands report has just been released and it’s revealed some stark findings — 37 of the companies listed are tech brands, and three of the ten largest brands (by value) own the world’s leading online advertising platforms.
Of all the companies in the top 100, tech companies now account for more than half the value of the total — 54 per cent — up from 37 per cent only ten years ago.
In 2017 major players Google, Microsoft and Facebook, and retail giant Amazon soared in value. The proliferation of next-gen advertising technologies has led to a notable increase in the number of businesses investing in online advertising channels, such as Pay Per Click (PPC) and Google AdWords, to support their growth plans.
Top Ten Brands 2017
Company Name: Value in 2017 ($m) (% Growth 2016-17)
- Google: 245,581 (+7.1%)
- Apple: 234,671 (+2.7%)
- Microsoft: 143,222 (+17.5%)
- Amazon: 139,286 (+40.7%)
- Facebook: 129,800 (+26.5%)
- AT&T: 115,112 (+7.1%)
- Visa: 110,999 (+10.1%)
- Tencent: 108,292 (+27.4%)
- IBM: 102,088 (+18.4%)
- McDonald’s: 97,723 (+10.2%)
Digital Ad Growth at 13.4%
Unsurprisingly Google — which owns AdWords, the world’s biggest Pay Per Click ad platform — has remained in a dominant position throughout 2017. Google’s AdWords platform accounted for 88% of its revenue in 2016, with 79 billion Dollars (around £61 billion) of PPC advertisements sold in that year.
The internet giant was responsible for stealing sizeable chunks of market share from traditional advertising channels, influencing the share price of the world’s leading ad agency WPP, which tumbled 10% in August.
Globally, both Facebook and Google’s ad revenues accounted for nearly 20% of all advertising spending last year, up from 16.3% in 2015 and 10.6% in 2012.
Although Google doesn’t publicly disclose who its customers are, we know that many household brands (Unilever, Audi, Budweiser for example) plus tens of thousands of SMEs and start-ups are investing heavily in PPC whilst at the same time reducing spend on traditional channels.
Data from the Internet Advertising Bureau shows that online advertising spend in the UK increased 13.4% in 2016. In contrast, spend in areas like direct mail and newspaper advertising fell by up to 13.2% compared with 2015.
Ongoing improvements to the features available for paid search advertisers are critical factors here. Google has seen a strong uptake in its advanced ad targeting technologies which enable advertisers to reach specific groups of individuals based on their browsing habits and interests.
When compared to traditional channels like print, radio and TV, the ability to reach individuals at such specific levels simply cannot be achieved.
44% Growth in Social Media Advertising
Facebook has enjoyed similar successes to Google in 2017. Despite slower than expected user growth the company has reported enviable figures in its revenue, boasting over nine billion Dollars in Q2 which represents growth year-on-year of 44%.
These figures clearly indicate a stable position for the tech giant, although the reported growth is down from Q2 2016 which saw 59% year-on-year gains. Facebook cites the ‘ad load’ of the platform as a contributing factor to this expected dip in growth, noting that Facebook’s News Feed has reached capacity in the number of ads it can display without negatively impacting user satisfaction.
Facebook’s overall profits for Q2 2017 reached 3.89 billion Dollars. Why is this notable? It’s the first time in history that the company has exceeded Google’s profit figures for the same period. While a commendable achievement, the fact that Google was handed a 2.7 billion Dollar anti-trust fine in the same period impacted this event.
Are You Ready for Disruption?
As is indicated by its growth, Pay Per Click is seen by the business sector as a critical marketing channel not to be sniffed at. The advanced targeting, coupled with the ability to scale efficiently according to individual budgets, is a big selling point; targeting users in increasingly sophisticated ways provides companies with the potential for exceptional ROI over traditional forms of advertising.
Ongoing improvements to AdWords will only make things better. New functions and features for 2017 include device bid adjustments to tailor ad campaigns separately to different devices. Life-event targeting, being introduced in Q4, will enable advertisers to reach individuals based on specific big-ticket life events such as graduating from university, getting married or reaching retirement.
With these improvements sure to provide both better ROI and reduced administrative time spent managing and monitoring marketing initiatives, the Pay Per Click industry remains in a healthy and competitive state as the year closes.