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Three Companies Now Control 50% + of Ad Spending; none of them are television networks
From:
Richard Gottlieb -- Toy Industry Expert Richard Gottlieb -- Toy Industry Expert
For Immediate Release:
Dateline: New York, NY
Wednesday, March 24, 2021

 

Many of us, and particularly those who grew up during the age of television, radio, newspapers, and magazines, may be surprised to learn that Google, Facebook and Amazon “…now collect more than half of all ad dollars spent in the U.S.” That’s according to a Wall Street Journal article by Keach Hagey and Suzanne Vranica entitled, “How Covid-19 Supercharged the Advertising ‘Triopoly’ of Google, Facebook and Amazon.”

The rise was inenvitable but it was sped up by Coronavirus. As the authors put it:

The Big Three of digital advertising—Google, Facebook and Amazon—already dominated that sector going into 2020. The pandemic pushed them into command of the entire advertising economy.

Advertising is a zero-sum game, so there have to be losers if digital is such a big winner. According to the article, television, and magazines, along with billboards, all experienced double-digit decreases in revenue.

The toy industry came of age during the birth of television advertising in the 1950s. There was a time when a trip to meet with a retail buyer meant detailing a television ad campaign. TV advertising is, as a consequence, a hard habit for many in the toy industry to break.

But break it we must. No matter our habits, the days of television dominating advertising are over, and probably for the better. Advertising on TV was expensive, and it was too high a hurdle for all but the largest companies. That meant that the bigger you were, the more money you had to spend on television advertising and the more likely you were to get the most favored shelf space. Those lower costs of entry through digital advertising lower the investment bar and open the door to smaller, more entrepreneurial start-ups.

The question is whether Facebook, Amazon and Google will continue to dominate after people walk away from screens and back to school and work. The Journal article refers to the three companies as a Triopoly. They are, of course, not the first such threesome in advertising. Many of us can remember when CBS, NBC, and ABC were the Triopoly of advertising. Nothing stays the same for ever.

Richard Gottlieb

Global Toy Experts / Global Toy News

646 675 3019

richard@globaltoyexperts.com

 

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Dateline: New York, NY United States
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