New research from market analyst firm Omdia shows that Google, Amazon, Meta (formerly Facebook), and Apple – collectively GAMA – will command 70% of the online advertising market outside of China by the end of 2021. The latest outlook comes from Omdia’s Advertising Intelligence Service, which provides net advertising revenue forecasts split by media, company, and format for 67 individual countries, plus global regions.
GAMA significantly outperformed the total global advertising market in 2020, posting 17% combined growth compared to -1% decline in total global net media advertising revenue. This outperformance of the market continued into 2021 and is driving up GAMA’s share of total global net media advertising revenue as media owners, which stood at 33% in 2020 and is set to reach 39% by the end of 2021.
Google in particular continues to outperform the overall advertising market in 2021. Marija Masalskis, senior principal analyst at Omdia, commented: “Based on Google’s results for the first three quarters of 2021, we are projecting that the company will see full-year growth of 40.6% – its highest full-year growth since 2007.”
Omdia analysis shows that while market leaders in traditional media segments, such as linear TV, will continue to enjoy strong positions in their increasingly small corners of the market, GAMA’s dominance of online advertising looks set to continue unabated. As a result, media owners across the open internet, outside of GAMA’s walled gardens, will see their share of the total market shrink, despite efforts to boost scale and technological integration through new partnerships and consolidation. These players will also be more heavily impacted by pivots to privacy and the impending death of cookies – expected to start in 2H23 – than the tech giants due to the strength of the first-party data and user reach they enjoy within their own ecosystems.
GAMA’s strength in the advertising market is even greater when their roles as ad technology and network providers are considered. When including all online ad revenue that flows through their platforms, GAMA’s share of total net media advertising revenue increases to 45% in 2021, and its share of the online segment increases to 65%. This means that just 35% of global online ad revenue generated by media owners remained untouched by Google, Amazon, Meta or Apple during 2021.
Matthew Bailey, principal analyst at Omdia, commented: “Google, Meta and, increasingly, Amazon dominate the global online advertising market outside of China, and their influence over the entire media ecosystem will only grow further in the coming years as online cements itself as the dominant media advertising format.” When excluding China – the world’s second-largest advertising market where GAMA’s ad operations are prohibited – GAMA’s share of total net media advertising revenue in 2021 rises to 46%, while their share of online advertising revenue stands at 70% during the same year – or 81% if you include all online ad revenue flowing through their platforms. GAMA’s media owner share of total net media advertising revenue excluding China will reach 51% by 2025.
Bailey continued: “Short of significant regulatory intervention, GAMA’s position in the media advertising market will dwarf that of even the most prominent broadcast and media groups, most of whom will need to make dramatic strategic changes to survive – let alone thrive – within this new competitive landscape.”
Taking a closer look at GAMA on an individual company level, each has overlapping yet distinct dominance over certain online advertising segments. Google remains the undisputed leader in the online paid search advertising, taking 73% of total global revenue outside of China in 2021. However, Amazon is an increasingly powerful force in this segment as more consumers turn to its platform for initial product searches, and it will eat into Google’s share to 2025, when it will take 16% of paid search advertising revenue outside of China.
Amazon’s sponsored product ads and increasing presence in the ad-supported video on-demand (AVOD) space will also see it increase its share of the online display segment to 8% in 2025 outside of China as ecommerce continues to grow across the globe. However, this segment will continue to be dominated by Meta and its constituent social properties to 2025, when they will collectively take 41% of online display revenue outside of China. While Meta also dominates the out-stream – or in-feed – video advertising segment, it will see increased competition in this space from other social video sharing platforms, such as ByteDance’s TikTok.
Google also enjoys a strong position as a media owner in the online display segment through YouTube, which accounted for 36% of global TV-like in-stream video advertising revenue outside of China in 2021, and its growing stable of other display ad-supported services, such as Gmail and the Google Discover feed.
Apple is least ad-reliant member of GAMA, with advertising accounting for just 0.4% of the company’s revenue in 2020. However, the company exerts a disproportionate influence over the mobile advertising segment, which accounted for 71% of total online advertising revenue in 2021. Apple has made privacy central to the marketing pitch for its devices and services for the past few years, and 2021 has seen it make changes to its mobile operating system that boost privacy options and make tracking and targeting ads across different apps much more difficult, impacting social platform and mobile publishers’ ad revenue. This includes market leader Meta, which saw an unprecedented quarter on quarter decline between Q2 and Q3 for the first time in 2021. Although these moves will increase the appeal of Apple’s own mobile advertising products, Omdia expects advertising to remain a very small part of the company’s future strategy.
Read more about GAMA’s influence over the global advertising market in Omdia’s latest report, 2022 Trends to Watch: GAMA, Big Tech, and Walled Gardens in Advertising.
