![Facebook And Google Made Secret Deal To Monopolise Digital Advertising An explosive lawsuit has revealed that Mark Zuckerberg and Google CEO Sundar Pichai struck a secret deal in 2018 where they would carve up the digital advertising between the two empires. Recently unredacted court filings show that the deal guaranteed Facebook a fixed percentage of advertising auctions they ‘bid’ on through Google. It is alleged that Google reached out to Facebook after realising they posed a competitive risk. According to the lawsuit, COO Sheryl Sandberg massaged the deal, before handing it off to Zuckerberg. “We’re nearly ready to sign and need your approval to move forward,” Sandberg wrote in an email to Zuckerberg. “Facebook CEO [REDACTED] wanted to meet with COO [REDACTED] and his other executives before making a decision,” the complaint said. “Google CEO Sundar Pichai also personally signed off on the terms of the deal.” This information comes to light after a federal judge in New York ordered the original heavily redacted court documents be undone, with the information deemed to be in the public interest. Other newly revealed information, includes claims that Google misled both publishers and advertisers as to how its advertising auctions worked, artificially inflating prices for some buyers, while reducing revenue for some advertisers – a practice that amounts to “insider information” according to Google employees quoted in the suit. 15 states, plus Puerto Rico are currently suing Google for antitrust violations. Google spokesperson Peter Schottenfels told Politico they will seek a dismissal of the lawsuit. “Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit. “Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. “There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.” Meta likewise rubbished the suit. “Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” Meta spokesperson Christopher Sgro said. “These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.” Google, Facebook and Amazon have monopolized the advertising market The advertising industry closed the 2020 pandemic with a total decline of 7.8%, but in the digital segment it recorded a positive sign of + 6%. A growth driven almost exclusively by the three technological giants that represent about 80% of Italian digital advertising investments Among the less discussed consequences of the pandemic is the evolution of the advertising market. A sector reshaped by the lockdown and restrictions applied by almost all countries, which forced shops and offices to close, then prompted companies to review their advertising plans. In the last year, most people have spent more time than usual with their eyes on the computer screen, have surfed the net according to their needs, have increased the time allocated to video, social and gaming platforms . And he spent on e-commerce rather than in-store shopping. Thus, new earning opportunities were born for companies able to control and monetize personal data: greater use of online platforms means a greater amount of information available to Google, Facebook, Amazon, which have become even more attractive in the eyes of advertisers. . The three companies mentioned are the ones that dominated the digital advertising sector in 2020. To have the measure of the dominance of the advertising sector it is enough to consider that the three giants of technology, for the first time in history, last year collected the most part of all advertising spending by companies in the United States. The three companies increased their share of the digital advertising market in the United States from 80% in 2019 to around 90% in 2020. The Wall Street Journal talked about it in an article signed jointly by Keach Hagey and Suzanne Vranica, who define the triad of Facebook, Google, Amazon, "a triopoly". The business newspaper explains the phenomenon starting from the example of Mondelez, an American multinational food company: "Last year it moved the money destined for the television commercials of the college basketball championship and the Tokyo Olympics, which had been suspended, to digital platforms . So for the first time, Mondelez spent more on online ads last year than on TV. And the major beneficiaries were Facebook and Google ». The American market is the one for which there is more data available, but also at the Italian level the dynamics are the same, they tell Linkiesta from the Wavemaker media agency: "According to data from GroupM's Business Intelligence department, the Italian advertising market (TV, radio, press, billboards, digital) recorded a total decrease of -7.8%, with digital products which closed with a positive sign of + 6%. This growth is mainly driven by big techs (Google, Facebook, Amazon) which represent about 80% of Italian digital advertising investments, and by a recovery in the last part of the year by other players, including large publishers. Italians ". In fact, the growth of online advertising last year has also occurred in relative terms, since every other type of advertising expenditure has decreased, both for television, for newspapers, and for all other options. It is the trend, rather than the photography of the moment, that reflects the measure of change: according to Nielsen data in 2019 digital advertising was worth 3.3 billion euros, against 3.6 billion for TV. While in 2020 of the 6.9 billion total collections, 42% is the prerogative of the web, 41% of the TV, 8% of the printed media and 4% of the radio. And those online earnings ended up in the hands of the tech giants. Taking Mondelez's example from the Wall Street Journal: «By 2021, digital advertising is expected to represent more than half of the approximately $ 1.1 billion that Mondelez spends on media around the world. It was only about 30% in 2017. While the TV share of the company's advertising spending continues to decrease ». The decisive factor of digital advertising is that the enormous amount of data available to large online platforms offers the possibility of creating targeted advertising that would not be possible in any of the traditional advertising systems. “When Mondelez invests in digital advertising, it gets a 25% better return than TV ads. He found that his Google and Facebook ads perform exceptionally well, generating 40% higher returns than any other digital ad. The two Big Tech giants now account for about 60% to 70% of Mondelez's digital ad spend, up from less than 50% in 2017, ”writes the Wall Street Journal. Many of the changes caused by the pandemic are likely to remain. But when the pandemic is unlikely to end, "the triopoly" will continue to increase its market shares at this rate: with the spread of the vaccine and the relaxation of restrictions, consumers should rebalance their daily lives, spending less time and money online, convincing marketers to diversify their spending. The scientific director of the Internet Media Observatory of the Politecnico di Milano Giuliano Noci explains to Linkiesta that "these large companies have now become such pervasive platforms that their data acquisition capacity allows them to be very precise in the transmission of messages, advertising and quantities. 'other and this is an enormous structural advantage ». Noci, however, makes a distinction between Google and Facebook, on the one hand, and Amazon, on the other: "If the first two have a core business on these marketing services, Amazon is more anchored to its platform: it works very closely with the moment in which the need to purchase occurs, therefore it remains more linked to its own ecosystem. So the loss of relevance of the physical store is even more evident ». In a market like the Italian one, made up above all of small and medium-sized enterprises, it makes all the difference in the world. As they say by Wavemaker, "for SMEs, digital has often been the only point of contact between them and the public, in a context of total or partial closure of their business" In fact, the use of Amazon.it as an online sales channel has contributed to helping small and medium-sized Italian companies to maintain or grow their business even during the pandemic, accelerating a trend already underway. An Amazon Italia report published at the end of 2020 revealed that between June 2019 and May 2020 "14 thousand entrepreneurs who sell through the e-commerce platform sold more than 60 million products in Amazon stores, compared to 45 million a year earlier, on average, it is more than 100 products per minute, and they recorded sales for an average of over 75 thousand euros, an increase compared to about 65 thousand in the same period of the previous year ». In this way, the dependence, if it can be defined as such, of the market on the big Big Tech players has increased.](https://blogger.googleusercontent.com/img/a/AVvXsEjQTH0z9i0mDtoQ7Kgulm-D-_J0E7h8w09zu5JzYdSmXlaNzDkZYUT5R9tFoQkj0Am9cAgc3KWDsmGdVIDqhn5sWgQJ9bIQhvNiS5KArD9g2gdGTaL7WgQiVKG4UPEc5GW9yycBLucQGsNFZS6UaG62gCwA-B8ENySUT1iVnzQeTj1kCcXhPqU9V3Mc=w320-h213 "Facebook And Google Made Secret Deal To Monopolise Digital Advertising")
![Facebook And Google Made Secret Deal To Monopolise Digital Advertising An explosive lawsuit has revealed that Mark Zuckerberg and Google CEO Sundar Pichai struck a secret deal in 2018 where they would carve up the digital advertising between the two empires. Recently unredacted court filings show that the deal guaranteed Facebook a fixed percentage of advertising auctions they ‘bid’ on through Google. It is alleged that Google reached out to Facebook after realising they posed a competitive risk. According to the lawsuit, COO Sheryl Sandberg massaged the deal, before handing it off to Zuckerberg. “We’re nearly ready to sign and need your approval to move forward,” Sandberg wrote in an email to Zuckerberg. “Facebook CEO [REDACTED] wanted to meet with COO [REDACTED] and his other executives before making a decision,” the complaint said. “Google CEO Sundar Pichai also personally signed off on the terms of the deal.” This information comes to light after a federal judge in New York ordered the original heavily redacted court documents be undone, with the information deemed to be in the public interest. Other newly revealed information, includes claims that Google misled both publishers and advertisers as to how its advertising auctions worked, artificially inflating prices for some buyers, while reducing revenue for some advertisers – a practice that amounts to “insider information” according to Google employees quoted in the suit. 15 states, plus Puerto Rico are currently suing Google for antitrust violations. Google spokesperson Peter Schottenfels told Politico they will seek a dismissal of the lawsuit. “Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit. “Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. “There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.” Meta likewise rubbished the suit. “Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” Meta spokesperson Christopher Sgro said. “These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.” Google, Facebook and Amazon have monopolized the advertising market The advertising industry closed the 2020 pandemic with a total decline of 7.8%, but in the digital segment it recorded a positive sign of + 6%. A growth driven almost exclusively by the three technological giants that represent about 80% of Italian digital advertising investments Among the less discussed consequences of the pandemic is the evolution of the advertising market. A sector reshaped by the lockdown and restrictions applied by almost all countries, which forced shops and offices to close, then prompted companies to review their advertising plans. In the last year, most people have spent more time than usual with their eyes on the computer screen, have surfed the net according to their needs, have increased the time allocated to video, social and gaming platforms . And he spent on e-commerce rather than in-store shopping. Thus, new earning opportunities were born for companies able to control and monetize personal data: greater use of online platforms means a greater amount of information available to Google, Facebook, Amazon, which have become even more attractive in the eyes of advertisers. . The three companies mentioned are the ones that dominated the digital advertising sector in 2020. To have the measure of the dominance of the advertising sector it is enough to consider that the three giants of technology, for the first time in history, last year collected the most part of all advertising spending by companies in the United States. The three companies increased their share of the digital advertising market in the United States from 80% in 2019 to around 90% in 2020. The Wall Street Journal talked about it in an article signed jointly by Keach Hagey and Suzanne Vranica, who define the triad of Facebook, Google, Amazon, "a triopoly". The business newspaper explains the phenomenon starting from the example of Mondelez, an American multinational food company: "Last year it moved the money destined for the television commercials of the college basketball championship and the Tokyo Olympics, which had been suspended, to digital platforms . So for the first time, Mondelez spent more on online ads last year than on TV. And the major beneficiaries were Facebook and Google ». The American market is the one for which there is more data available, but also at the Italian level the dynamics are the same, they tell Linkiesta from the Wavemaker media agency: "According to data from GroupM's Business Intelligence department, the Italian advertising market (TV, radio, press, billboards, digital) recorded a total decrease of -7.8%, with digital products which closed with a positive sign of + 6%. This growth is mainly driven by big techs (Google, Facebook, Amazon) which represent about 80% of Italian digital advertising investments, and by a recovery in the last part of the year by other players, including large publishers. Italians ". In fact, the growth of online advertising last year has also occurred in relative terms, since every other type of advertising expenditure has decreased, both for television, for newspapers, and for all other options. It is the trend, rather than the photography of the moment, that reflects the measure of change: according to Nielsen data in 2019 digital advertising was worth 3.3 billion euros, against 3.6 billion for TV. While in 2020 of the 6.9 billion total collections, 42% is the prerogative of the web, 41% of the TV, 8% of the printed media and 4% of the radio. And those online earnings ended up in the hands of the tech giants. Taking Mondelez's example from the Wall Street Journal: «By 2021, digital advertising is expected to represent more than half of the approximately $ 1.1 billion that Mondelez spends on media around the world. It was only about 30% in 2017. While the TV share of the company's advertising spending continues to decrease ». The decisive factor of digital advertising is that the enormous amount of data available to large online platforms offers the possibility of creating targeted advertising that would not be possible in any of the traditional advertising systems. “When Mondelez invests in digital advertising, it gets a 25% better return than TV ads. He found that his Google and Facebook ads perform exceptionally well, generating 40% higher returns than any other digital ad. The two Big Tech giants now account for about 60% to 70% of Mondelez's digital ad spend, up from less than 50% in 2017, ”writes the Wall Street Journal. Many of the changes caused by the pandemic are likely to remain. But when the pandemic is unlikely to end, "the triopoly" will continue to increase its market shares at this rate: with the spread of the vaccine and the relaxation of restrictions, consumers should rebalance their daily lives, spending less time and money online, convincing marketers to diversify their spending. The scientific director of the Internet Media Observatory of the Politecnico di Milano Giuliano Noci explains to Linkiesta that "these large companies have now become such pervasive platforms that their data acquisition capacity allows them to be very precise in the transmission of messages, advertising and quantities. 'other and this is an enormous structural advantage ». Noci, however, makes a distinction between Google and Facebook, on the one hand, and Amazon, on the other: "If the first two have a core business on these marketing services, Amazon is more anchored to its platform: it works very closely with the moment in which the need to purchase occurs, therefore it remains more linked to its own ecosystem. So the loss of relevance of the physical store is even more evident ». In a market like the Italian one, made up above all of small and medium-sized enterprises, it makes all the difference in the world. As they say by Wavemaker, "for SMEs, digital has often been the only point of contact between them and the public, in a context of total or partial closure of their business" In fact, the use of Amazon.it as an online sales channel has contributed to helping small and medium-sized Italian companies to maintain or grow their business even during the pandemic, accelerating a trend already underway. An Amazon Italia report published at the end of 2020 revealed that between June 2019 and May 2020 "14 thousand entrepreneurs who sell through the e-commerce platform sold more than 60 million products in Amazon stores, compared to 45 million a year earlier, on average, it is more than 100 products per minute, and they recorded sales for an average of over 75 thousand euros, an increase compared to about 65 thousand in the same period of the previous year ». In this way, the dependence, if it can be defined as such, of the market on the big Big Tech players has increased.](https://blogger.googleusercontent.com/img/a/AVvXsEj85DvstTzMQWsNWKSf5L7jYhKSfmL_7IFXB5C9rls5y6i8UxW-4DaDAb0lbeRHrWrxGtHYNYHlctjrFj4Dvak4Y5wjYIq_eRE-4n29oF4eU_UUuDzggbQR6HzsNVav13lATEdpn1o2Rsxh1X2Kq8LNffppY4yky9GsuNLsQPu-lfMzH4dZTHlSeZDd=s16000 "Facebook And Google Made Secret Deal To Monopolise Digital Advertising")
Facebook And Google Made Secret Deal To Monopolise Digital Advertising
An explosive lawsuit has revealed that Mark Zuckerberg and Google CEO Sundar Pichai struck a secret
deal in 2018 where they would carve up the digital advertising between the two empires.
Recently unredacted court filings show that the deal guaranteed Facebook a fixed percentage of advertising auctions they ‘bid’ on through Google. It is alleged that Google reached out to Facebook after realising they posed a competitive risk.
According to the lawsuit, COO Sheryl Sandberg massaged the deal, before handing it off to Zuckerberg.
“We’re nearly ready to sign and need your approval to move forward,” Sandberg wrote in an email to Zuckerberg.
“Facebook CEO [REDACTED] wanted to meet with COO [REDACTED] and his other executives before making a decision,” the complaint said.
“Google CEO Sundar Pichai also personally signed off on the terms of the deal.”
This information comes to light after a federal judge in New York ordered the original heavily redacted court documents be undone, with the information deemed to be in the public interest.
Other newly revealed information, includes claims that Google misled both publishers and advertisers as to how its advertising auctions worked, artificially inflating prices for some buyers, while reducing revenue for some advertisers – a practice that amounts to “insider information” according to Google employees quoted in the suit.
15 states, plus Puerto Rico are currently suing Google for antitrust violations.
Google spokesperson Peter Schottenfels told Politico they will seek a dismissal of the lawsuit.
“Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit.
“Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world.
“There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.”
Meta likewise rubbished the suit.
“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” Meta spokesperson Christopher Sgro said.
“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.”
Google, Facebook and Amazon have monopolized the advertising market
The advertising industry closed the 2020 pandemic with a total decline of 7.8%, but in the digital segment it recorded a positive sign of + 6%. A growth driven almost exclusively by the three technological giants that represent about 80% of Italian digital advertising investments
Among the less discussed consequences of the pandemic is the evolution of the advertising market. A sector reshaped by the lockdown and restrictions applied by almost all countries, which forced shops and offices to close, then prompted companies to review their advertising plans.
In the last year, most people have spent more time than usual with their eyes on the computer screen, have surfed the net according to their needs, have increased the time allocated to video, social and gaming platforms . And he spent on e-commerce rather than in-store shopping.
Thus, new earning opportunities were born for companies able to control and monetize personal data: greater use of online platforms means a greater amount of information available to Google, Facebook, Amazon, which have become even more attractive in the eyes of advertisers. .
The three companies mentioned are the ones that dominated the digital advertising sector in 2020. To have the measure of the dominance of the advertising sector it is enough to consider that the three giants of technology, for the first time in history, last year collected the most part of all advertising spending by companies in the United States. The three companies increased their share of the digital advertising market in the United States from 80% in 2019 to around 90% in 2020.
The Wall Street Journal talked about it in an article signed jointly by Keach Hagey and Suzanne Vranica, who define the triad of Facebook, Google, Amazon, "a triopoly".
The business newspaper explains the phenomenon starting from the example of Mondelez, an American multinational food company: "Last year it moved the money destined for the television commercials of the college basketball championship and the Tokyo Olympics, which had been suspended, to digital platforms . So for the first time, Mondelez spent more on online ads last year than on TV. And the major beneficiaries were Facebook and Google ».
The American market is the one for which there is more data available, but also at the Italian level the dynamics are the same, they tell Linkiesta from the Wavemaker media agency: "According to data from GroupM's Business Intelligence department, the Italian advertising market (TV, radio, press, billboards, digital) recorded a total decrease of -7.8%, with digital products which closed with a positive sign of + 6%. This growth is mainly driven by big techs (Google, Facebook, Amazon) which represent about 80% of Italian digital advertising investments, and by a recovery in the last part of the year by other players, including large publishers. Italians ".
In fact, the growth of online advertising last year has also occurred in relative terms, since every other type of advertising expenditure has decreased, both for television, for newspapers, and for all other options.
It is the trend, rather than the photography of the moment, that reflects the measure of change: according to Nielsen data in 2019 digital advertising was worth 3.3 billion euros, against 3.6 billion for TV. While in 2020 of the 6.9 billion total collections, 42% is the prerogative of the web, 41% of the TV, 8% of the printed media and 4% of the radio.
And those online earnings ended up in the hands of the tech giants. Taking Mondelez's example from the Wall Street Journal: «By 2021, digital advertising is expected to represent more than half of the approximately $ 1.1 billion that Mondelez spends on media around the world. It was only about 30% in 2017. While the TV share of the company's advertising spending continues to decrease ».
The decisive factor of digital advertising is that the enormous amount of data available to large online platforms offers the possibility of creating targeted advertising that would not be possible in any of the traditional advertising systems.
“When Mondelez invests in digital advertising, it gets a 25% better return than TV ads. He found that his Google and Facebook ads perform exceptionally well, generating 40% higher returns than any other digital ad. The two Big Tech giants now account for about 60% to 70% of Mondelez's digital ad spend, up from less than 50% in 2017, ”writes the Wall Street Journal.
Many of the changes caused by the pandemic are likely to remain. But when the pandemic is unlikely to end, "the triopoly" will continue to increase its market shares at this rate: with the spread of the vaccine and the relaxation of restrictions, consumers should rebalance their daily lives, spending less time and money online, convincing marketers to diversify their spending.
The scientific director of the Internet Media Observatory of the Politecnico di Milano Giuliano Noci explains to Linkiesta that "these large companies have now become such pervasive platforms that their data acquisition capacity allows them to be very precise in the transmission of messages, advertising and quantities. 'other and this is an enormous structural advantage ».
Noci, however, makes a distinction between Google and Facebook, on the one hand, and Amazon, on the other: "If the first two have a core business on these marketing services, Amazon is more anchored to its platform: it works very closely with the moment in which the need to purchase occurs, therefore it remains more linked to its own ecosystem. So the loss of relevance of the physical store is even more evident ».
In a market like the Italian one, made up above all of small and medium-sized enterprises, it makes all the difference in the world. As they say by Wavemaker, "for SMEs, digital has often been the only point of contact between them and the public, in a context of total or partial closure of their business"
In fact, the use of Amazon.it as an online sales channel has contributed to helping small and medium-sized Italian companies to maintain or grow their business even during the pandemic, accelerating a trend already underway.
An Amazon Italia report published at the end of 2020 revealed that between June 2019 and May 2020 "14 thousand entrepreneurs who sell through the e-commerce platform sold more than 60 million products in Amazon stores, compared to 45 million a year earlier, on average, it is more than 100 products per minute, and they recorded sales for an average of over 75 thousand euros, an increase compared to about 65 thousand in the same period of the previous year ». In this way, the dependence, if it can be defined as such, of the market on the big Big Tech players has increased.
An explosive lawsuit has revealed that Mark Zuckerberg and Google CEO Sundar Pichai struck a secret
deal in 2018 where they would carve up the digital advertising between the two empires.
Recently unredacted court filings show that the deal guaranteed Facebook a fixed percentage of advertising auctions they ‘bid’ on through Google. It is alleged that Google reached out to Facebook after realising they posed a competitive risk.
According to the lawsuit, COO Sheryl Sandberg massaged the deal, before handing it off to Zuckerberg.
“We’re nearly ready to sign and need your approval to move forward,” Sandberg wrote in an email to Zuckerberg.
“Facebook CEO [REDACTED] wanted to meet with COO [REDACTED] and his other executives before making a decision,” the complaint said.
“Google CEO Sundar Pichai also personally signed off on the terms of the deal.”
This information comes to light after a federal judge in New York ordered the original heavily redacted court documents be undone, with the information deemed to be in the public interest.
Other newly revealed information, includes claims that Google misled both publishers and advertisers as to how its advertising auctions worked, artificially inflating prices for some buyers, while reducing revenue for some advertisers – a practice that amounts to “insider information” according to Google employees quoted in the suit.
15 states, plus Puerto Rico are currently suing Google for antitrust violations.
Google spokesperson Peter Schottenfels told Politico they will seek a dismissal of the lawsuit.
“Despite Attorney General Paxton’s three attempts to re-write his complaint, it is still full of inaccuracies and lacks legal merit.
“Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world.
“There is vigorous competition in online advertising, which has reduced ad tech fees, and expanded options for publishers and advertisers.”
Meta likewise rubbished the suit.
“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” Meta spokesperson Christopher Sgro said.
“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.”
Google, Facebook and Amazon have monopolized the advertising market
The advertising industry closed the 2020 pandemic with a total decline of 7.8%, but in the digital segment it recorded a positive sign of + 6%. A growth driven almost exclusively by the three technological giants that represent about 80% of Italian digital advertising investments
Among the less discussed consequences of the pandemic is the evolution of the advertising market. A sector reshaped by the lockdown and restrictions applied by almost all countries, which forced shops and offices to close, then prompted companies to review their advertising plans.
In the last year, most people have spent more time than usual with their eyes on the computer screen, have surfed the net according to their needs, have increased the time allocated to video, social and gaming platforms . And he spent on e-commerce rather than in-store shopping.
Thus, new earning opportunities were born for companies able to control and monetize personal data: greater use of online platforms means a greater amount of information available to Google, Facebook, Amazon, which have become even more attractive in the eyes of advertisers. .
The three companies mentioned are the ones that dominated the digital advertising sector in 2020. To have the measure of the dominance of the advertising sector it is enough to consider that the three giants of technology, for the first time in history, last year collected the most part of all advertising spending by companies in the United States. The three companies increased their share of the digital advertising market in the United States from 80% in 2019 to around 90% in 2020.
The Wall Street Journal talked about it in an article signed jointly by Keach Hagey and Suzanne Vranica, who define the triad of Facebook, Google, Amazon, "a triopoly".
The business newspaper explains the phenomenon starting from the example of Mondelez, an American multinational food company: "Last year it moved the money destined for the television commercials of the college basketball championship and the Tokyo Olympics, which had been suspended, to digital platforms . So for the first time, Mondelez spent more on online ads last year than on TV. And the major beneficiaries were Facebook and Google ».
The American market is the one for which there is more data available, but also at the Italian level the dynamics are the same, they tell Linkiesta from the Wavemaker media agency: "According to data from GroupM's Business Intelligence department, the Italian advertising market (TV, radio, press, billboards, digital) recorded a total decrease of -7.8%, with digital products which closed with a positive sign of + 6%. This growth is mainly driven by big techs (Google, Facebook, Amazon) which represent about 80% of Italian digital advertising investments, and by a recovery in the last part of the year by other players, including large publishers. Italians ".
In fact, the growth of online advertising last year has also occurred in relative terms, since every other type of advertising expenditure has decreased, both for television, for newspapers, and for all other options.
It is the trend, rather than the photography of the moment, that reflects the measure of change: according to Nielsen data in 2019 digital advertising was worth 3.3 billion euros, against 3.6 billion for TV. While in 2020 of the 6.9 billion total collections, 42% is the prerogative of the web, 41% of the TV, 8% of the printed media and 4% of the radio.
And those online earnings ended up in the hands of the tech giants. Taking Mondelez's example from the Wall Street Journal: «By 2021, digital advertising is expected to represent more than half of the approximately $ 1.1 billion that Mondelez spends on media around the world. It was only about 30% in 2017. While the TV share of the company's advertising spending continues to decrease ».
The decisive factor of digital advertising is that the enormous amount of data available to large online platforms offers the possibility of creating targeted advertising that would not be possible in any of the traditional advertising systems.
“When Mondelez invests in digital advertising, it gets a 25% better return than TV ads. He found that his Google and Facebook ads perform exceptionally well, generating 40% higher returns than any other digital ad. The two Big Tech giants now account for about 60% to 70% of Mondelez's digital ad spend, up from less than 50% in 2017, ”writes the Wall Street Journal.
Many of the changes caused by the pandemic are likely to remain. But when the pandemic is unlikely to end, "the triopoly" will continue to increase its market shares at this rate: with the spread of the vaccine and the relaxation of restrictions, consumers should rebalance their daily lives, spending less time and money online, convincing marketers to diversify their spending.
The scientific director of the Internet Media Observatory of the Politecnico di Milano Giuliano Noci explains to Linkiesta that "these large companies have now become such pervasive platforms that their data acquisition capacity allows them to be very precise in the transmission of messages, advertising and quantities. 'other and this is an enormous structural advantage ».
Noci, however, makes a distinction between Google and Facebook, on the one hand, and Amazon, on the other: "If the first two have a core business on these marketing services, Amazon is more anchored to its platform: it works very closely with the moment in which the need to purchase occurs, therefore it remains more linked to its own ecosystem. So the loss of relevance of the physical store is even more evident ».
In a market like the Italian one, made up above all of small and medium-sized enterprises, it makes all the difference in the world. As they say by Wavemaker, "for SMEs, digital has often been the only point of contact between them and the public, in a context of total or partial closure of their business"
In fact, the use of Amazon.it as an online sales channel has contributed to helping small and medium-sized Italian companies to maintain or grow their business even during the pandemic, accelerating a trend already underway.
An Amazon Italia report published at the end of 2020 revealed that between June 2019 and May 2020 "14 thousand entrepreneurs who sell through the e-commerce platform sold more than 60 million products in Amazon stores, compared to 45 million a year earlier, on average, it is more than 100 products per minute, and they recorded sales for an average of over 75 thousand euros, an increase compared to about 65 thousand in the same period of the previous year ». In this way, the dependence, if it can be defined as such, of the market on the big Big Tech players has increased.
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