This is how the online advertising market is divided

Published on: August 29, 2018 / Updated on: August 31, 2018 – Author: Konrad Wolfenstein

+++ How the online advertising market is divided +++ Snapchat has a marketing problem +++ Instagram and YouTube are the most lucrative for influencers +++ How big is Google's advertising business? +++ The advertising duopoly +++ Facebook's growing weight in the online advertising market +++ Instagram is becoming increasingly promotional +++ Internet advertising is annoying +++ Customers who bought this item also bought… +++ Personalized advertising is booming +++ Where products are advertised +++

eMarketer , Google and Facebook account for roughly half of all digital advertising revenue. The two tech giants owe this to the dominant market position of their online platforms (including Google, YouTube, Facebook, and Instagram). Alibaba follows in third place. Analysts expect the Chinese company to increase its share of online advertising revenue to over ten percent by 2019. Snapchat is also trending toward growth. The company's advertising revenue could triple, albeit only from 0.3 to 0.9 percent.

You can find more infographics at Statista

Snapchat has a marketing problem

Social Media Examiner, almost every social media marketing specialist relies on the world's largest social network. The situation is different for Snapchat. Only eight percent of those surveyed use the messaging service, which is used by 191 million people daily. This is not good news for Snap, the company behind the app. If this trend continues, it will likely be difficult for them to ever get out of the red.

You can find more infographics at Statista

Instagram and YouTube are the most lucrative for influencers

Goldmedia, influencers from Germany, Austria, and Switzerland (DACH region) generate 34 percent of their revenue through Instagram. YouTube is the second most important channel, accounting for 31 percent of revenue. Facebook and Snapchat, on the other hand, play only a minor role. Analysts estimate the total influencer revenue for 2017 at around €560 million. The market in the DACH region is expected to grow to nearly €1 billion by 2020.

You can find more infographics at Statista

This is how big Google's advertising business is

Alphabet's stellar financial performance is largely due to its search engine. In the second quarter of 2017 alone, Google generated an operating profit of $7.8 billion. Online advertising revenue in 2016 amounted to $79.4 billion. By comparison, $22 billion was spent on advertising in Germany during the same period – and that's not just online, but across all channels. Only the US surpasses Google in advertising volume.

You can find more infographics at Statista

The advertising duopoly

The progressive shift of advertising from traditional media to the internet has not only resulted in a redistribution of advertising revenues from publishers, TV and radio stations to online media, but has also led to an unprecedented concentration of the advertising market.

The dominant market position of the online platforms operated by Google and Facebook (including Google, YouTube, Facebook, and Instagram) means that, according to a recent estimate, will capture around 60 percent of global online advertising spending this year. As the Statista graphic shows, this is equivalent to one in four euros spent worldwide on advertising – online or offline – now ending up with these two Silicon Valley giants.

You can find more infographics at Statista

Facebook's growing weight in the online advertising market

Bad times for Facebook: After it became known that the company Cambridge Analytica used data from the social media giant in both the election campaign for US President Donald Trump and for Brexit, the share price is falling and users are turning away.

Facebook has now run several full-page print ads in which CEO Mark Zuckerberg apologizes to users. But collecting data for targeted advertising is, simply put, Facebook's business model. "Data misuse is a feature, not a bug," as Ethan Zuckerman writes for The Atlantic . Except that in this case, it wasn't shoes that were being sold, but political opinions that were being influenced.

As the Statista graphic shows, the social network's advertising business has grown significantly in recent years. In 2017, advertising revenue accounted for almost 20 percent of the entire global online advertising market. It remains to be seen how the current debate will affect this in the future. Reportedly, some major advertisers are already turning away or at least temporarily suspending their advertising.

You can find more infographics at Statista

Instagram is becoming increasingly promotional

Instagram has evolved into a well-oiled advertising machine. This is shown by data from InfluencerDB , a database for Instagram influencers. According to their findings, the number of sponsored posts rose to over 100,000 per month in August. The analysis is based on ten selected tags used to mark sponsored content. The actual number of sponsored posts is likely to be significantly higher, especially since many posts are not even labeled as sponsored.

You can find more infographics at Statista

Internet advertising is annoying

Which advertising is annoying and which is helpful? Statista explored this question in a recent survey. The results showed that respondents overwhelmingly find almost all forms of online advertising annoying – this is especially true for video ads on news websites and advertising in email newsletters. Germans find TV commercial breaks even more bothersome, with 66 percent finding them disruptive. In contrast, advertising in stores, direct mail, and in daily newspapers is seen as helpful.

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Customers who bought this item also bought…

Customers who bought this item also bought product X and product Y. Online shops often suggest other items to customers, but does this form of advertising actually work? According to a recent Statista survey, apparently it does. Sixty percent of the online shoppers surveyed regularly pay attention to suggestions from shops about which other items might be of interest to them – and the majority find that the suggestions align well with their purchasing interests. Furthermore, of those who pay attention to suggested items, 39 percent say that they occasionally or even frequently buy such products.

You can find more infographics at Statista

Personalized advertising is booming

Programmatic advertising uses user data to deliver personalized ads. According to the German Association for the Digital Economy (BVDW), this form of online advertising generated €592 million in revenue in Germany in 2016. BVDW experts anticipate a market volume of €864 million for the current year, representing an increase of 46 percent. Stefan Zarnic (Burda Community Network), Chairman of the Programmatic Advertising Focus Group at the BVDW, explains: “The rapid development of programmatic advertising continues and is exceeding our own forecasts.”

You can find more infographics at Statista

Where products are advertised

Have you ever noticed that depending on whether you're listening to the radio or browsing the internet, you're shown completely different products? This isn't solely due to personalized online advertising, but also to how much advertising budget individual industries invest in these channels.

In Germany, people are confronted with at least 2,500 advertising messages every day; some even speak of 10,000. However, only a fraction of these are noticed. Nevertheless, studies assume that advertising investments will continue to rise in the future.

The following graphic shows which sectors, measured by their advertising investments , have the strongest presence on radio and the internet. Retail and mail order, for example, are particularly active on the radio. However, their online advertising investments are significantly lower at €156 million, representing just a quarter of their radio spending. The financial sector holds the top spot online, with an advertising budget of almost €270 million in 2016.

You can find more infographics at Statista