Alphabet (new name for Google’s holding company, 1st), Facebook (5th), Baidu (9th), Yahoo (15th) and Microsoft ( 17th) generated US$88bn in media revenue. This figure means a 34% of all the revenues earned by the top 30 companies in ZenithMedia’s Top Thirty Global Media Owners report published today, and represents 65% of the entire global Internet advertising market. Their collective dominance of digital advertising means that these five companies have captured most of the gains from its rapid growth. Digital adspend has grown at an average of 18% a year for the past five years, driven by the spread of mobile technology, the rise of social media and online video, and improved advertising technology, such as programmatic buying and local real time search. Adspend across all other media has grown by just 0.6% a year.
“The big five digital media owners control most of the world’s Internet advertising market, and its rapid growth is propelling them up the ranking of the biggest global media owners,” said Jonathan Barnard, Zenith’s Head of Forecasting. “The traditional media owners in our top 30 ranking have been scrambling to scale up their own digital businesses, to various degrees of success. As digital ad technology – such as programmatic buying – spreads to traditional media, it will further shake up the businesses of traditional media owners, but also provide them with new opportunities for growth.”
The Top Thirty Global Media Owners report is a unique ranking of the world’s largest media companies by media revenue, as estimated by Zenith. The report was launched in 2007 and was last published by Zenith in 2015. Zenith defines media revenue as all revenue deriving from businesses that support advertising, to determine which companies are most important for the marketing industry
Alphabet leapfroggs Disney taking the first spot
Alphabet (the new name for Google’s holding company) has increased its lead as the world’s largest media owner in the new ranking published today by Zenith. The company’s media revenues total US$60bn, 166% more than its nearest rival’s, Walt Disney. Alphabet has steadily pulled away from Disney over the past few years; last year it was 136% larger than Disney, up 21% on the previous year.
Digital tech giants in the ranking move up with Facebook as the fastest growing media owner
The four other digital giants among the top 30 global media owners (Facebook, Baidu, Yahoo and Microsoft) all have moved up in the ranking this year.
Facebook has moved up from 10th place last year to 5th place this year; Baidu has gone up from 14th to 9th; Yahoo from 18th to 15th; and Microsoft from 21st to 17th.
Facebook is as well the fastest growing media owner in our top 30, with media revenues up 65% on last year. Baidu is second fastest (up by 52%) and Alphabet is third (up by 17%).
Digital tech giants’ push hinders change to digital revenues for traditional media shops
As said above and following the data published by Zenith, while Digital adspend has grown at an average of 18% a year for the past five years, adspend across all other media has grown by just 0.6% a year.
Faced with stagnant revenues from their core businesses, traditional media owners have invested in their digital activities, either expanding digital extensions of their existing brands or creating new
stand alone digital products.
This movement has been particularly strong among newspaper and magazine publishers, which have suffered from long term decline in demand for their print products in most developed markets.
However, most media owners have found competition much more intense on the Internet than in their traditional markets, since the barriers to entry are so low and the cost of distribution is effectively zero.
This environment of strong competition along with the dominance of the digital tech giant players, has made it difficult for many media owners to replace lost revenues from their traditional businesses with new digital revenues, explains Barnard.
Nearly half of the top 30 media owners in Zenith’s ranking have lost media revenues compared to last year, although in two cases (Time Warner and CBS) this is because media owners have changed or transferred the ownership of some of their media activities. Time Warner has spun off its magazine division as a stand alone company, Time Inc, which makes its debut in this report at number 30th. CBS Corporation has withdrawn from the outdoor advertising business.
Image over the headline.- Jonathan Barnard (Zenith’s Head of Forecasting). Image by courtesy of Jonathan Barnard.
