Digital Giants Tighten Their Grip on Top Media Owner Ranking

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Digital Giants Tighten Their Grip on Top Media Owner Ranking

2015.01.23-Global_Communication_Strategy

Alphabet (the new name for Google’s holding company) has increased its lead as the world’s largest media owner in the new ranking published today by Zenith. The company’s media revenues total US$60bn, 166% more than its nearest rival’s, Walt Disney. Alphabet has steadily pulled away from Disney over the past few years; last year it was 136% larger than Disney, up 21% on the previous year.

The Top Thirty Global Media Owners report is a unique ranking of the world’s largest media companies by media revenue, as estimated by Zenith. The report was launched in 2007 and was last published by Zenith in 2015. Zenith defines media revenue as all revenue deriving from businesses that support advertising, to determine which companies are most important for the marketing industry.*

There are four media giants among the top 30 global media owners – Facebook, Baidu, Yahoo and Microsoft – and all have risen up the ranking this year. Facebook has moved up from 10th place last year to 5th place this year; Baidu has moved up from 14th to 9th; Yahoo from 18th to 15th; and Microsoft from 21st to 17th. Facebook is the fastest-growing media owner in our top 30, with media revenues up 65% on last year. Baidu is second-fastest (up by 52%) and Alphabet is third (up by 17%).

Between them, the five digital giants generated US$88bn in media revenue, which is 34% of all the revenues generated by our top 30 companies, and represents 65% of the entire global internet advertising market. Their collective dominance of digital advertising means that these five companies have captured most of the gains from its rapid growth. Digital adspend has grown at an average of 18% a year for the past five years, driven by the spread of mobile technology, the rise of social media and online video, and improved advertising technology, such as programmatic buying and local real-time search. Ad spend across all other media has grown by just 0.6% a year.

Faced with stagnant revenues from their core businesses, traditional media owners have invested in their digital activities, either expanding digital extensions of their existing brands or creating new stand-alone digital products. This has been particularly pronounced among newspaper and magazine publishers, which have suffered from long-term decline in demand for their print products in most developed markets. However, most media owners have found competition much more intense on the internet than in their traditional markets, since the barriers to entry are so low and the cost of distribution is effectively zero.

This high competition, and the dominance of the digital giants, has made it difficult for many media owners to replace lost revenues from their traditional businesses with new digital revenues. Nearly half of our top 30 media owners have lost media revenues compared to last year, although in two cases this is because media owners have disposed of some of their media activities. Time Warner has spun off its magazine division as a stand-alone company – Time Inc, which makes its debut in this report at number 30 – while CBS Corporation has withdrawn from the outdoor advertising business.

“The big five digital media owners control most of the world’s internet advertising market, and its rapid growth is propelling them up the ranking of the biggest global media owners,” said Jonathan Barnard, Zenith’s Head of Forecasting. “The traditional media owners in our top 30 ranking have been scrambling to scale up their own digital businesses, to various degrees of success. As digital ad technology – such as programmatic buying – spreads to traditional media, it will further shake up the businesses of traditional media owners, but also provide them with new opportunities for growth.”

* Definition of media revenues

Zenith defines media revenue as all revenues deriving from businesses that support advertising – television broadcasting, newspaper publishing, internet search, social media, and so on. This includes not only advertising revenues but also other revenues generated by these businesses, such as circulation revenues for newspapers or magazines. This provides a clear picture of the size and negotiating power of the biggest global media owners that advertisers and agencies have to deal with. The report covers the financial year 2014, which is the latest year for which we have consistent revenue figures from all of the publicly listed companies.

Ranking of Top 30 Global Media Owners 2016

Rank Media owner Rank Media owner
1 Alphabet 16 Time Warner
2 The Walt Disney Company 17 Microsoft
3 Comcast 18 Asahi Shimbun Company
4 21st Century Fox 19 CCTV
5 Facebook 20 Hearst Corporation
6 Bertelsmann 21 JC Decaux
7 Viacom 22 Axel Springer
8 CBS Corporation 23 Mediaset
9 Baidu 24 ITV plc
10 News Corporation 25 Fuji Media Holdings
11 Advance Publications 26 Hubert Burda Media
12 iHeartMedia Inc. 27 Gannett
13 Discovery Communications 28 ProSiebenSat.1
14 Grupo Globo 29 Yomiuri Shimbun Holdings
15 Yahoo 30 Time Inc.

 

For further information, please contact:

Jonathan Barnard

Head of Forecasting                                                                       

Tel: +44 20 7961 1192

Email: jbarnard1@publicisgroupe.net

 

Tim Collison

Global Communications Director

Tel: +44 20 7961 1126

Email: tcolliso@publicisgroupe.net

 

About Zenith

Zenith is part of Publicis Media, which is one of the four solutions hubs of Publicis Groupe, alongside Publicis Communications, Publicis.Sapient and Publicis Healthcare. Led by Steve King, CEO, Publicis Media is powered by its four global brands, Starcom, Zenith, Mediavest | Spark and Optimedia | Blue 449, and supported by its digital-first, data-driven Global Practices which together deliver client value and business transformation. Publicis Media is committed to helping its clients navigate the modern media landscape and is present in more than 100 countries with over 13,500 employees worldwide.


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