Top Channels for Global Advertising Spend
Digital advertising has now passed traditional media in total advertising spend. Most of this growth how been in only the last 20 years and is only accelerating. The only traditional form of advertising that is continuing to grow is television, but for how much longer?
Search Revenue Leads the Way in Digital
With the advent of the world wide web, search engines became the gatekeepers of websites. One search engine in particular dominated search traffic and this is of course Google. It didn't take long for Google to realize the potential of online advertising, and this quickly became its main source of revenue. Even now, Google holds 80% of the search market and is therefore the principle channel if you're a business that wants to be found.
Microsoft's Bing has made inroads in recent years and now has around 10% of the market. However, they are still only a minor player when you consider how many eyeballs Google still serves. As you can see in the chart, by 2020 the search advertising market is worth around $125 Billion and is growing rapidly. Google still pulls in the majority of that market, which is a tremendous amount of revenue. Advertising is still the main source of revenue for the company despite the diversification of the business.
Online Video & Social Media Showing Rapid Growth
Social Media became on obvious form of advertising revenue when smartphones became mainstream towards the end of the 2000s, especially on Facebook due the sheer size of its reach and the ability to target users based on their interests. With billions of people now on the platform using it for free, advertising is the main source of revenue for Facebook. Other platforms such as Instagram (another Facebook property) and TikTok have been making ground on Facebook in terms of reach, but Facebook is still by far the dominant recipient of that $86 billion of global advertising revenue in 2020.
If you watch YouTube, you may have noticed many more interruptions to your videos (if you're not a paid subscriber). YouTube itself has seen huge growth in the number of people using the platform and have clearly decided to monetize those eyeballs. This is yet another way that advertising is making up the core of Google's business (they purchased YouTube way back in 2006).