Meta, Amazon, and Google dominate digital ad spend, taking up 64% of the total $200 billion. Behind them are other key players like Twitter and LinkedIn.
Why do advertisers keep spending with them? Your gut reaction may be “reach” or “scale.” While traffic volume is a key factor, it’s not the only reason that advertisers love working with these publishers.
In another article, “5 Ways to Differentiate Your Ad Platform,” we touch upon five ways to make your ad platform stand out: traffic, audience, targeting, ad units, and performance. Ad platforms need at least one; the most successful ones have all five.
This article highlights how each of the aforementioned ad platforms master most or all of these vertices, providing insights as you launch your own ad business to compete with them.
Google makes it easy to spend at scale via traditional banner display and their “pay-per-click” search ads. Their ad platform (Google Ad Manager, previously Adwords) accounts for nearly 30% of all digital ad spend. Here’s how Google has succeeded at each of the five key differentiators:
Traffic: More eyeballs means more people to monetize, and Google is the top-visited website, with 90 billion visits in December 2021 alone.
Audience: With ad products across Gmail, Google.com, YouTube, and a network of millions of publishers, Google provides an unparalleled ability to reach custom audiences, even down to specific sites and YouTube channels.
Targeting: Google’s search ad product accounts for the majority of their ad revenue - and for good reason. Someone searching for “where to buy yoga pants” is showing high purchasing intent; a brand like Lululemon would pay generously to be the first result. And then for display, advertisers have a ton of targeting options too: demographics, search history, interests, and more.
Ad Units: Google provides 5 main ad units: display, in-feed, in-article, multiplex ads, and search engine ads (alongside their YouTube video ads). Their offering allows advertisers to target users with a variety of ads through one self-serve platform, which is especially enticing to smaller advertisers.
Performance: Search advertising is reliably the most cost-effective advertising channel. In a recent Gartner report, advertisers rated search ads as having a low cost, yet the highest quality of any spend. The second highest quality channel? Targeted digital display, which Google also offers. As a predominately direct response ad platform, Google’s performance and scale make it easy for advertisers to justify increasing their spend over time.
Google didn’t get to 30% of digital ad spend through traffic alone. To do that, they also had to become the industry leader in targeting options, ad unit variety, and performance.
Meta (mainly consisting of Facebook and Instagram) took 24% of digital ad spend in 2021 (about $115B), making them the second largest ad platform in the world. Here’s how they got there:
Audience: With that traffic comes loads of different audiences and demographics to target. Audience intention, however, also matters, and this platform works much better for B2C brands than B2B ones, as the average Facebook user is not browsing for work purposes.
Targeting: Facebook’s self-serve dashboard allows advertisers to create many hyper-targeted campaigns based on location, demographics, interests, behavior, connections, and more. Want to target cyclists who live in Minneapolis between the ages of 18 and 30? With Facebook, you can.
Ad units You can serve native in-feed ads like images, videos, carousels, or collection ads. Advertisers love these native ads because they allow users to interact in other ways than clicks - such as comments and likes.
Performance: Facebook is a goldmine for B2C and DTC brands because its targeting options make it easy to reach their target personas at scale. No other platform offers such granular (and accurate) demographic targeting. These native ads also perform much better than standard banner ads: Facebook reports 2x higher user engagement and 3x user retention.
Amazon is the third largest ad platform valued at over 30 billion a year. Amazon’s primary advertisers are their merchants paying to promote their products in search results. Here’s what they are doing right:
Traffic: Amazon sees about 2.5 billion site visitors per month. They are the 13th most visited global site, and the #1 eCommerce site. Their scale naturally interests vendors wanting increased discoverability.
Audience: These visitors are especially valuable to vendors because they have the intent to shop. Amazon’s audience is composed almost entirely of people close to or at the buying stage.
Targeting: Amazon’s key option is product targeting, so you can sponsor your product as users are searching for or have searched for products like yours. This can be more powerful than Google’s search targeting, as you can target people who searched for a specific item in the past, not just in the moment.
Ad units: Amazon enables vendors to reach customers throughout the buying process with sponsored products, banner ads, “you may also like” promotions, and more. This versatility enables advertisers to test different ad units to see what works for them.
Performance: As shown above, advertisers rate search ads as the best performing channel, and Amazon offers their vendors just that. Amazon is especially known for their ROAS (return on ad spend) reporting, allowing merchants to see exactly how much incremental revenue they are making from their ad spend.
While much smaller than the above advertising triopoly, Twitter’s ad platform is still one of largest in the world, driving $4 billion in 2021.
Traffic: Twitter is the #4 most visited global site and sees around 7 billion monthly visits.
Audience: Like others on this list, Twitter’s reach provides access to a variety of potential audiences actively engaged in reading content, and its platform has a higher number of users who pursued higher education than other networks.
Targeting: Twitter offers two unique targeting options: (1) the ability to reach followers of a specific handle and (2) the targeting of hashtags/keywords. This means Lululemon could target all 1.4 million followers of Yoga Journal in a single campaign. Or, they could target anyone who recently used the word “yoga” in a tweet. Such targeting enables advertisers to reach users when they are actively thinking about a relevant topic.
Ad units: Twitter offers a suite of native ad units like promoted posts, image, video, carousel, and moment ads.
Performance: Twitter generally doesn’t deliver as immediate a return on investment as the top three, as their demographic targeting isn’t as rich as Meta’s, and they don’t have buying intent targeting like Amazon or Google. Still, Twitter has cemented itself as an important ad platform for driving brand awareness and relevance. Their unique targeting options allow advertisers to insert themselves into relevant conversations, which provides long-term value beyond just direct response.
LinkedIn is the go-to B2B ad platform. On pace for $5B in ad revenue in 2022, LinkedIn currently accounts for 1.5% of total digital ad spend. To get there, they mastered all five differentiators:
Audience: No other ad platform offers access to such a large work-focused audience. This makes it particularly valuable to B2B marketers looking to reach key business decision makers. On top of that, their sponsored job listings ad unit makes it easy for hiring managers to reach people actively looking for new jobs.
Targeting: LinkedIn targeting is valuable because it allows you to target by a person’s company, department, title, etc. A new marketing automation vendor, for instance, could target people with “Marketing” titles who work at companies with fewer than 100 employees. Meanwhile, recruiters can sponsor their job listings, and LinkedIn targets them to people actively searching for similar roles.
Ad units: Like the others, LinkedIn offers a variety of innovative ad units, including in-feed native ads, video ads, traditional banners, sponsored job listings, and more.
Performance: LinkedIn is the preferred network for B2B advertisers, according to Demandware, with 71% saying they spend on it (the second highest was Facebook at 51%). Given B2B advertisers have little ability to reach these audiences outside of LinkedIn, it’s no surprise LinkedIn can deliver results that keep them spending.
When building your own ad business, keep these mega ad platforms in mind. Remember that a successful ad program boils down to differentiating your ad product. Advertisers expect to see these five characteristics as you demonstrate your ROI: traffic, audience, targeting, ad units, and performance.
It’s hard to do all of them well, but if you can excel at at least a few, you have the potential to build a high-revenue ad program that can siphon advertisers away from these top ad platforms.
We are committed to the vision that every online retailer and publisher should be able to add user-first ad revenue streams and take back the Internet from Google, Amazon, and Facebook. Customers like Ticketmaster, Yelp, Strava, Mozilla, and many more have already launched successful ad platforms on Kevel.
Sarah is an experienced writer with a software background, allowing her to translate between ad tech experts and lay readers. As Kevel's Associate Product Marketing Manager, she helps broadcast new products and features.
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