Wednesday, 2 July 2014

MOBILE ADVERTISING MARKET SOARS BUT DO MEDIA ORGANISATIONS PROSPER?

This question lies at the heart of the purpose of this blog, IT.Scheiss.

On 19 March, 2014, eMarketer reported that global mobile ad spending in 2013 increased 105.0% to total $17.96 billion and that this year (2014) mobile advertising is on track to rise another 75.1% to $31.45 billion, accounting for nearly one-quarter of total digital ad spending worldwide.

Now that would have the mobile communications and content industry dancing with ecstatic joy, and the information technology (IT) and business media breathlessly proclaiming this fact to the world, that mobile is the next big thing in advertising, where Web-advertising was lacklustre.

There surely will be a whole lot of half-baked and self-styled mobile media CON-sultants going around telling every media organisation in town that they should all drop print and go mobile, and if they needed help, well pay them their hefty CON-sultancy fees. They'll also be charging hefty fees to speak at seminars and conferences.

Sure! No argument! Reality informs us that mobile advertising revenues are growing worldwide, and we heard it said over 10 years ago that Web advertising would the "next big thing".

However, Web advertising didn't quite happen as expected, especially not for mass media organisations which either hoped for or were led by new media CON-sultants into believing that it would, and they jumped onto online bandwagon. But, on the other hand, current real-world evidence points to quite a different story for mobile advertising which looks like it's actually on the road to great heights.

Still, based upon the actual experience of mass media, the big question remains as to who actually prospers from this mobile advertising trend. Would it be newspapers, magazines, radio and TV stations which set up mobile editions accessible on tablets and smartphones or is it some other companies which are not really mass media publishers or broadcasters?

The second paragraph of the eMarketer report answers that question:-

"Facebook and Google accounted for a majority of mobile ad market growth worldwide last year. Combined, the two companies saw net mobile ad revenues increase by $6.92 billion, claiming 75.2% of the additional $9.2 billion that went toward mobile in 2013. The two companies are consolidating their places at the top of the market, accounting for more than two-thirds of mobile ad spending last year—a figure that will increase slightly this year, according to eMarketer."

I'll leave you to read the rest of the eMarketer article here but this begs the questions- Whither the future of journalism as a viable paying career in the long term. After all, how many journalists, radio and TV announcers do Google, Facebook and Twitter employ, especially when their business model is to get a the masses to post all kinds of content on their sites, which gets THEM the eyeballs and ears, which then attracts advertisers to THEM?



Meanwhile, IT and business journalists will wax ecstatic over young billionaires Marc Zuckerberg, Larry Page, Sergey Brin, etc., etc., etc. but will these companies even bother to advertise on their publications and in turn help support the livelihoods of these journalists who so faithfully and adoringly support and publicise them?

Also, bear in mind that portals like Facebook, Google, Twitter, etc. have borderless reach to the eyeballs and ears of anyone with a connected device anywhere in the world, so what chance do local mass media publications and broadcasters in respective countries have in the face of these big guys, especially when with a few taps of a keyboard, then can customise each advertisement on their sites to appear to consumers in respective countries and even in their local language. Like you visit a Web site hosted in say the U.K. and you ad about something in Malaysia pops up. Yes, they automatically know where you are, from your IP (Internet Protocol) address, so know how to target you with an ad for a product or service provider in your country, and not half way around the world from you.

Proponents of the open and borderless world of the Internet touted it as turning the world into a global village in which every business, big or small could compete on a "level playing field", but what this starry-eyed, libertarian, globalist view ignores is that a featherweight boxer has a very poor chance of defeating a heavyweight boxer on a level playing field, so likewise, what chance does a local publication or website have in terms of competing for advertising revenue against such global giants online.

Thankfully, over 10 years is sufficient time to allow those of us who have a brain to think and who use it to compare actual outcomes in the real-world against the theories expounded by these Utopian proponents of cyberspace, who saw it as an environment in which to realise their ideal world, which had failed to come true earlier.

Where once, the Internet was seen as the "great leveller", which would "undermine" the dominance of large media corporations, established corporations, etc., today, we see huge corporations such as Google, Facebook and Twitter dominating cyberspace.

No doubt, the these portals all began as small and cuddly start-up companies and yes, sites like Amazon.com and other online shopping sites are undermining or have undermined the existence of traditional brick and mortar retail chains, but instead of creating the wide freedom of choice in an online bazaar, these cute and cuddly start-ups have metamorphosised into global corporate giants in cyberspace in place of the brick and mortar corporations which they displaced or are inmarket forces themselves, operating within unfettered free market environments, are the very forces which cause that free market to gravitate towards eventual monopoly, passing through a long period of oligopoly along the way the process of displacing.

As I have often said, that market forces themselves, operating within unfettered free market environments, are the very forces which cause that free market to gravitate towards eventual monopoly, passing through a long oligopoly phase along the way.

Right now, giants like Google, Facebook, Twitter and some others are part of that oligopoly in cyberspace. Over time, some of these big corporations may fall by the wayside due to intense competition and economic conditions, or the oligopoly will stabilise with a handful of big players dominating the scene.

Please don't credit me for mentioning this dialectical-materialist tendency, since it's been observed and identified by many economists over the past centuries, and its operation has been observed in many other industries, such as oil & gas, aerospace, automotive, print and broadcast media, and so on, since long before the advent of the Internet.

For example, when the Boeing 747 airliner first went into commercial services in 1970 with Pan American World Airways, other wide body airliner manufacturers in the United States were McDonnell-Douglas and Lockheed who respectively rolled out their DC10 and L-1011 Tristar offerings, whilst over the Atlantic in Britain, there was Vickers, de Havilland and others who produced civil airliners. However 44 years later, McDonnell-Douglas is now a part of Boeing and Lockheed has dropped out of the civil airline business and now focuses on military aircraft,

Today there's a global oligopoly of two, with Boeing now locked in a battle for survival against Airbus across the Atlantic.

So. By its inherent nature, a free market gravitates towards eventual monopoly.

Another way of putting it is:- The embryo once conceived in the womb, has already begun its long and winding journey towards the tomb.


QED

IT.Scheiss


1 comment:

  1. Fullscoop Digital Advertising is not just another Digital Advertising Agency. It is known for its outstanding approach and offline-online integration. Bringing digital on road is need of the hour and FullScoop is among the early birds to understand this. With this unique approach Team Full scoop is all set to achieve many more such triumphs. I am Happy to have such a great team! Thanks everyone for the great endeavor! Keep it up!
    ==================================
    Social media marketing in Indore, Digital marking company in Indore

    ReplyDelete