While the pandemic has left many companies on the brink of bankruptcy, while others are trying to float out on the basis of effort and goodwill. That has not happened with technological giants, who have found themselves in a better position in the face of the crisis, as they could never have imagined before. This is confirmed by GroupM, who estimated that Google, Facebook, and Amazon accounted for more than half of all advertising investment for the first time in the US. Things are never seen before.
This preliminary report, to which The Wall Street Journal has had access, confirms that this has been due to the enormous growth of electronic commerce promoted by the pandemic and the greater time that users have spent on digital platforms. All this has caused these monsters of the digital age to generate huge profits, thus dividing the "ad spend pie" in two.
The GroupM projection calculates that Google absorbed up to 67,210 million, Facebook 35,220 million, and Amazon 14,630 million of advertising planning in the US. The three companies add up to 117,160 million, which exceeds the 115,270 that are distributed by the rest of the protagonists of the advertising media throughout the sector. By this, we mean the entire budget for advertising investment, not just the digital advertising category.
In 2019, Google, Facebook, and Amazon had totaled 101.4 billion, while the rest had reached 135.88 billion. That means that in 12 months of 43% of prominence, it happened to have 51% of the total of this budget. An achievement in profitability. This precedent is best understood when one makes comparisons with digital investment data, which has another distribution.
According to GroupM data, the estimate in 2019 of these three companies was 80% market share in the US. And in 2020, they had 90% of the entire digital market. That is, they grew in market share in their category, and they grew in share in the total sum of advertising investment. A really great year for Google, Facebook, and Amazon.
Experts attribute the profitability to the new habits that consumers now have on digital platforms. In addition to the efficiency of the advertising tools of these platforms. This allows small businesses to invest small amounts of investment in obtaining clients. Another piece of data, Facebook reported that in the third quarter it had reached 10 million active advertisers, 20% more than the 8% it had communicated in January.
Reasons for the growth of Google, Facebook, and Amazon
Without a doubt, the growth of investment in Google, Facebook, and Amazon has been due to the great trend towards online purchases. It was observed that the share of purchases made in the US went from 10% to 16%, only in the first week of confinement, or what we know as the first wave of the coronavirus. For now, it only remains to observe if this behavior is increasing and if these habits have really been installed in consumers, or end up being part of a moment so that it is later regularized.
Now every age group person has started showing trust in online purchases, which is a great sign for all eCommerce websites, as now everyone has started purchasing no matter how old they are.
The truth is that if the trend of consumer behavior is to focus on online purchases and you want to sell, it is important to take note and learn how to use these platforms, to take advantage of the buying trend.