Facebook and Google continue to gobble up digital advertising dollars, new reports shows

A new study shows that as online advertising spending continues to soar, more and more of that money is flowing into the coffers of tech platforms such as Facebook and Google.

According to the Canadian Media Concentration Research Project, online advertising spend rose from $8.8 billion to $9.7 billion over the past year. Of that growth, about 80 per cent went to Google and Facebook.

Some other noteworthy highlights from this report included:

  • Advertising spending across all media fell by half a billion dollars, to $15.2 billion, a modest year-over-year decline of four percent. This masks the severity of the losses experienced by four traditional media sectors, however: broadcast television, radio, newspapers and magazines. Revenue for these sectors plunged by $1.2 billion last year, a twenty percent loss; combined, revenue for these four traditional media sectors has dropped by $6 billion since 2008.  
  • In stark contrast to the state of traditional advertising-supported media, online advertising spending continued to soar, rising from $8.8 billion to $9.7 billion (an eleven percent increase year-over-year), 80% of which went into the coffers of Google and Facebook.  
  • Major international Internet giants such as Google, Amazon, Facebook, Apple, Microsoft and Netflix (i.e. GAFAM+ Inc.) have become significant figures on the media landscape. Combined, they had an estimated $10.9 billion in revenue last year from their Canadian operations, a year-over-year increase of sixteen percent, and a collective market share of 12%.  Yet to keep things in perspective, Canada’s Big 5 communications and media conglomerates took in seventy percent of the $91 billion in revenue across the network media economy last year.  
  • Last year was especially active on the legislative front, beginning with the publication of the Broadcasting and Telecommunications Legislative Review panel’s Canada’s Communication Future report early in the year, followed by the introduction of Bill C-10, the Broadcasting Act reform bill in November. The policy agenda has expanded since to include ongoing consultations with respect to online harms and making the “web giants” pay news media organizations for the news content they use as part of their search and social media services.

This report is the first in an annual two-part series on the state of the communication, Internet and media industries in Canada, now under the banner of the Global Media and Internet Concentration (GMIC) project, a new SSHRC-supported project directed by Dwayne Winseck bringing together fifty scholars in forty countries.

You can read some additional coverage of the report here.