By Alan Coleman on 31 Jan 2013
We Wolfgangers are eternally amazed at the sheer power and near monopoly of Google in the online advertising world. But would you be surprised if we told you, based on 2012 spend, Google now owns 9% of all advertising (both online and offline) worldwide? This makes for some exciting back-of-the-envelope calculations…
Global Advertising Revenues
So how much money is spent on advertising worldwide? According to ZenithOptiMedia global ad spending stood at around $497 billion in 2012, and is predicted to grow by 4.1% to $518 billion in 2013. Nielsen has a great 2012 3Q report on global advertising trends.
Google Revenues
Impressively, Google’s 2012 revenues surpassed the $50 billion mark for the first time. Equally – if not more – remarkable, is that revenues for Q4 last year jumped 36% year on year, and 8% quarter-on-quarter. Google’s revenue from advertising alone grew to $45.6 billion last year, meaning it –like previous years - still makes up the main chunk of Google’s total revenue and represents 9% of global advertising spend.
A Bit of Perspective
To put this into perspective, think about all the advertising spend invested in print advertising such as leaflets, newspapers/magazines, direct mailshots, billboards, the sides of buses, radio…even TELEVISION? And of course we must not forget about other providers of online advertising. Out of that ‘pot’ of advertising providers, Google can claim 9% to its name.
Furthermore, when we look at the breakdown of global advertising spend by medium, ZenithOptiMedia, identified that television still constitutes the bulk of global ad spend (40.4%). Newspapers (18.9%) and online advertising (17.8%) are ranked second and third based on 2012 estimations. This means that Google can claim hold of over half of the online advertising market.
What is even more interesting, however, are future estimates. It is estimated that from 2013, we will see online advertising surpass newspaper advertising spend globally; by 2015 online advertising will constitute 23.4% of global ad spend.
Our Thoughts…
There are two important things to note here.
With global advertising spend online surpassing newspaper ad spend, as well as an increasing trend towards content marketing over tradition advertising online (check out this cool infographic!), there will be an increased need to make the most of content posted online. Careful thought needs to be put into content development and associated ROI.Secondly, will Google’s share of wallet increase in parallel with global online ad spend? That is an answer which remains to be seen, but with Google being on top of their game as ever, it is hard to see how they won’t.
Of course, we at Wolfgang Digital have been preaching for long enough that there is no recession online. Perhaps some of you thought we were barking mad. Google is living evidence of our sanity!
