WARC Study Shows Depth of The Duopoly's Power

Of the $590.4bn spent globally on advertising last year, Google and Facebook took home a cool 24.5% – or $144.6bn, according to the latest WARC study.

Commonly referred to as ‘The Duopoly’, Google and Facebook are grabbing an increasing piece of the marketing pie – at an increasing rate.

The Duopoly’s share is up from 20.3% in 2017 and is more than double the 10.8% recorded in 2014. The pair are expected to increase their share again this year, up 4.1pp to 28.6% ($176.4bn).

Google and Facebook’s market share is more often referred to in terms of their dominance of digital investment, so WARC’s data is a fascinating insight into the bigger marketing picture.

According to the Australian Competition and Consumer Commission (ACCC), which investigated Google and Facebook’s market dominance in 2018, for every $100 spent on digital advertising, the ACCC estimates:

• $47 goes to Google
• $21 to Facebook
• $32 to all other websites

More Media Mergers, Layoffs and Consolidation Are Inevitable

Owners of traditional media channels have, collectively, recorded falling ad revenue in recent years. In 2014, this group took 74.0 cents of each dollar spent on advertising, though this is expected to dip to 53.4 this year.

While the fortunes of individual media owners will differ, the pool of ad money available to them is shrinking.

The recent high-profile layoffs at Buzzfeed and Vice are sadly, alas, a sign of further things to come.

2019 and 2020 will likely see increased media consolidation, with resultant job losses, as publishers and media owners increasingly look for economies of scale.

In 2018 Fairfax Media merged with Channel 9 in Australia, while in New Zealand several high profile media mergers have been mooted, and subsequently thrown out by competition authorities. Inevitably some will come to pass since it will fast become a matter of survival.

If WARC’s data is anything to go by, it will be rationalisation or bust for many in the media landscape. Notwithstanding government regulation, or intervention, which is the only real force which can slow down The Duopoly juggernaut.

Duopoly Spending BIG On Government Lobbying

The threat of regulation is a point not wasted on Google or Facebook.

In 2018 both Google and Facebook spent record amounts on government lobbying in the US. Spending was up 13% from 2017, with Google’s parent company, Alphabet, number 8 in the top 20 of spenders.

Likewise, just before Christmas, Britain’s former Deputy Prime Minister, Nick Clegg, joined Facebook as its Head of Global Affairs. Having a former PM on the books will probably come in handy.

Even if it is just Nick Clegg.

Given the clamour surrounding Google and Facebook at the moment, from regulators, MPs, pressure groups and media, they are going to have their work cut out to avoid the long arm of bureaucracy.

However, as we all know, with friends in the right places you can still be on the ‘wrong side of history’ and thrive.

In looking closer to home, having a friend in the Night Watch Man seems to be doing the coal industry no harm at all.