Online advertising is a lucrative business. Google reports a net profit margin of 23% and cash and investments of around $170 billion. And so it’s no surprise that competition is hotting quickly.
Meta (Facebook and Instagram) is an established player alongside Google. Amazon is newer to the game, but driving a very successful advertising business within its online store. Last quarter it generated $8.76 billion in advertising revenue, up 18% on the same quarter last year.
Apple, while much smaller ($4 billion for the quarter) has ambitions to grow its quarterly advertising revenue to double digits by expanding advertising on its free services like Apple News, Stocks, and Maps. It will also grow App Store advertising by encouraging more advertising by app developers within the store.
Microsoft has a smaller advertising business – roughly $ 3 billion for the quarter. Some of this came from the little used Bing search engine. It plans to introduce advertising into its free services. For example the free Outlook mobile app will begin dropping email advertisements into your inbox. They will look almost the same as regular emails. Sneaky!
Finally, Netflix. The service is expected to soon introduce a subscription service for about half the price of the existing service. It will include 4 minutes of advertising per hour – before and during programmes.
This picture is going to look very different in a couple of years!