Traditional advertising is beginning to be left behind by Big Tech. It is inevitable now that Google and Facebook will overtake the $200 billion TV advertising industry in the near future. This trend gives massive opportunities to small online businesses as the barriers to entry are so low.
This past week perfectly illustrated the quantum change in the advertising world with the events surrounding the digital giants, and vividly highlight the opportunities available to smaller e-commerce businesses.
Digital Marketing is available to all
The week’s powerful earnings reports from both Facebook and Google show without a shred of doubt that there is a tectonic shift in power in the advertising world. These two companies clearly dominate advertising revenue. With such low barriers to entry, there are exceptional opportunities for all businesses, not just major international brands. SMEs and small online e-commerce stores can now enter this global marketplace and target their advertising in ways never before imagined.
You want to target your widget to old baby boomers living in California, who are into Star Trek, and who have large annual incomes? No problem.
You want to target your piece of jewellery to women under thirty, living in England who love the X Factor? No problem.
Small family businesses can play on the same stage as the big international brands – they just need a little savviness in how to embrace Digital Marketing. You simply need to understand these platforms and ensure that what you do is mobile friendly.
Digital Video Advertising
A big part of Digital Marketing today is knowing how to embrace digital video marketing. This can be a goldmine for small businesses. This sector still only represents about $10 – $15 billion of advertising revenue, but is set to increase exponentially, particularly as technology develops with a seeming endless supply of advertising inventory.
For so many businesses the idea of producing a video may be a bit off putting, but there’s quite a lot of evidence to show that simple videos shot off your iPhone can often do the job quite effectively. Better to get something up there, albeit imperfectly, than be too perfectionist about it.
The evolution of the advertising industry
These opportunities are vividly clear in the aftermath of last week when Alphabet reported overall ad revenues of $19.14 billion, representing an annual increase of 19 per cent (with $15.4 billion attributable to Google websites and $3.74 to Google Network Members’ sites).
In addition, Facebook reported $6.24 billion in ad revenue which is up 63% over the preceding year. One really interesting element of this is that mobile ad revenue made up $5.24 billion of that figure and is growing even faster at a rate of a staggering 84%, but it’s probably not that surprising to anybody with eyes to see the way that members of the general public are constantly glued to their smartphones as they go about their daily business.
The global $200 billion TV advertising market is now within touching distance. It must be an inevitability now that Digital Advertising will overtake TV advertising in market share some time in the not too distant future.
If you exclude China, these two giants now account for some 72% of the world’s online advertising according to Brian Wieser, an analyst at Pivotal Research. His prediction is that their dominance will increase to 87% by the end of the decade.
Looking to stay ahead of the pack, Google is pioneering a form of Artificial Intelligence and Facebook is developing future advertising platforms from mobile messaging to virtual reality.
Last week also laid bare Twitter’s financial woes with its projection that showed its advertising business to be in trouble. It may be even decline in the 2016 third quarter. Interestingly one of the reasons cited by Twitter is the rise of online video advertising.
Verizon is trying to join the party announcing on 25th July its deal to buy Yahoo for $4.83 billion. It is to acquire Yahoo’s core business including its advertising products. Yahoo did of course pioneer the earliest business model in the internet: get the “eyeballs” and then somehow or other, monetise it. Time will tell if it is able to integrate AOL’s advertising products to create a third major force.
The message for small businesses and small independent e-commerce stores is clear: if you arm yourselves with some creative copy and intelligent use of marketing funnels and video advertising, you too can use internet advertising effectively and begin to compete with the big boys.