How COVID helped the Big Three tech giants take control of the US’s ad economy | WARC | The Feed
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How COVID helped the Big Three tech giants take control of the US’s ad economy
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Three US tech giants – the “triopoly” of Amazon, Facebook and Google – have found their business model supercharged by COVID-19.
Why it matters
The three already dominated digital ad spending prior to the pandemic, but they are emerging from it in the driving seat of the whole advertising sector, on and offline, The Wall Street Journal reports.
- For the first time, the Big Three now attract over 50% of all ad money spent in the US, according to analysis from ad agency GroupM. And the triopoly’s share of digital ad revenue went from 80% in 2019 to almost 90% last year. (Globally, WARC estimates the triopoly accounted for 72% of global online adspend in 2019, and expected that to top three quarters in 2020.)
- Three core trends, driven by the pandemic, have led to the growth – people spending more time on online devices, a big leap in newly formed businesses, and steady improvements in the tech giants’ ability to show ROI.
- With more online consumer spending, tech companies can offer ever more data about those consumers, allowing advertisers to precisely target their messaging.
- Before the pandemic, just over 10% of retail buying happened online. During the lockdowns during last year’s Q2, that figure jumped to 16%. The rate dropped back a little towards the end of the year, but the longer-terms trend seems clear.
“These companies that are data-science-driven get stronger and faster with a tailwind of usage – and COVID was a hurricane” – Tim Armstrong, former AOL chief executive who now leads Flowcode, a D2C platform.
Sourced from The Wall Street Journal
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