Study: Which big tech companies took home the lion's share of ad revenue in 2021?

Digital advertising has enjoyed an impressive growth this year and its not about to slow down, said a recent report by GroupM. GroupM's global end-of-year forecast studied the advertising industry and markets in major countries or regions in the world. According to the study, digital advertising is expected to grow by 30.5% by the end of this year, excluding political advertising in the US. The sub-sector is estimated to account for US$491 billion in its narrow definition, that is excluding revenues from digital extensions of traditional media, or US$537 billion in its broader form. The narrow form of digital advertising will grow by an additional 13.5% during 2022.

On this basis, digital advertising accounts for 64.4% of total advertising in 2021, up from 60.5% in 2020 and 52.1% in 2019. Excluding China, where digital advertising shares are particularly high, global digital advertising accounts for 58.7% of all advertising in 2021.

The world’s largest sellers of advertising outside of China, including Alphabet, Meta and Amazon, account for somewhere between 80% to 90% of the global total.

Looking at total advertising outside of China in all its forms, the three media giants represent more than 50% of the industry’s total in 2021, up from closer to 40% in 2019.
Meanwhile, at an industry level, television is the second important medium after digital. In its broadly defined form but excluding political advertising in the US, the report forecasted that global television advertising is expected to grow by 11.7% in 2021.

Given the depths of 2020’s decline, which amounted to a loss of 13.7%, the industry is not expected to return to 2019 levels until 2023, excluding US political advertising.
Subsequent years will be generally flat for television in most major markets around the world, as the largest advertisers that historically dominate the medium continue to shift their spending elsewhere incrementally. The shifts are offset in part by growing television budgets from the larger upstarts whose business are primarily online.

Overall, total TV advertising should amount to US$171 billion in 2022. Of that figure, about US$17 billion will go to Connected TV+. Covering the digital extensions of professionally produced television content, Connected TV+ remains poised to grow substantially, to US$33 billion in 2026.

The report said the primary reason for the growth in Connected TV+ advertising is that these platforms, such as Netflix, Amazon Prime and Disney+, are, and will remain, ad-free, and plan to remain so in most of the world for the foreseeable future. Consequently, the emerging world of television will simply offer fewer opportunities to advertise.
When it comes to the most important growth markets, the US, UK and China are the top three. Excluding political advertising, the US is expected to have a growth of 28.4%, while the UK is at 35.7%. In China, the market holds 18.8% growth.

The report said these countries have also been home to large numbers of suddenly big and rapidly growing venture-funded or early-stage publicly listed businesses. Many have driven their results through growth hacking techniques that relied heavily on Google, Meta and Amazon.

The study added that the rapid growth of the Chinese economy helped the other two markets in other ways too, including low-cost international postal rates, paired with narrow targeting of consumers on digital platforms, and the ease with which physical and virtual goods could be developed quickly helped build the Chinese brands' presence in the US and UK, among other places.

Speaking of China, prior to the pandemic, digital media accounted for just under 80% of the countries advertising market. However, this share grew substantially once the pandemic arrived and now accounts for nearly 90% of the entire market, one of the highest levels in the entire world. 

Bytedance has emerged as 2021’s leader in terms of absolute growth and size, and the company’s advertising revenue is now significantly greater than Alibaba’s, Tencent’s and Baidu’s.

In addition to Bytedance, Pinduoduo, JD.com, Kauishou and Meituan are each now among the world’s 25 largest sellers of advertising despite their mostly single-market presence. The scale of these companies has led to many other significant changes over the past year as the government has re-asserted its role in the economy by establishing new rules regarding the use of digital media by minors, the nature of content related to the “fan economy” and the use of algorithms and data.

The report also said anti-monopoly rules can improve the relationship between society and businesses, as "there has yet been any meaningful impact on advertising growth at an industry level". Looking ahead, China's growth is expected decelerate towards the high single digit as the pandemic-driven expansion of the industry moderates, said the report.

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