StrategyMediaReport: Alphabet leads Zenith Global Media Owners list but Asia makes waves

Report: Alphabet leads Zenith Global Media Owners list but Asia makes waves

Google's Alphabet is the world's largest media owner by media revenue, according to Zenith's Top 30 Global Media Owners list, but China's Baidu is raising the stakes.

Google’s Alphabet is the world’s largest media owner by media revenue, according to Zenith’s Top 30 Global Media Owners list, but China’s Baidu is raising the stakes.

The list is ranked according to each entity’s media revenue. For Alphabet, that’s media revenues worth US$60 billion this year, placing it well ahead of Walt Disney (in second spot) and Facebook (in fifth).

Digital giants dominate the list in terms of media revenue. The combined revenues of Alphabet, Facebook, Baidu, Yahoo and Microsoft (the five digital entities on the list), generated a combined media revenue of US$88 billion – 34% of all the revenues generated by the top 30 companies. This represents 65% of the entire global Internet advertising market, according to Zenith.

Facebook is the fastest-growing media owner. Its media revenues are up 65% on the previous year, Baidu is second fastest (up by 52%) and Alphabet third (up by 17%).

Here’s the Zenith list:

Zenith Optimedia_TOP 30 Publishers_2016China’s Baidu is one of the biggest movers on the list. It moved from 14th place in 2015 to ninth on this year’s list. Two years ago it was ranked 28th.

There are three reasons for Baidu’s rapid rise up the list, says Jonathan Barnard, head of forecasting, Zenith. These are:

  • The rapid growth of China’s ad market compared to the global average. China’s ad spend has grown three times faster than the global average over the last five years. Zenith forecasts China to become the leading contributor of new ad dollars to the global market for the period 2015-2018. This will see China taking over from the United States for the first time. Between 2015 and 2018 Zenith expects the global ad market to grow by US$75 billion – with China contributing 25% of this.

ZenithOptimedia_New Ad Spend_600

  • China’s rapid adoption of Internet advertising. China’s Internet sector has the fourth-highest share of total ad spend in the world.
  • Baidu’s innovation within China’s Internet sector – Baidu now accounts for 31% of all Chinese Internet ad spend.

Fast Track Asia

Barnard says we can expect to see more Asian companies making the list in the coming years as their domestic ad markets continue to grow and more Asian media owners expand their operations into other markets.

Asia is already “very important” to all the top digital platforms, says Barnard. While they don’t break down their revenues by region, Internet ad spend grew 26% in Asia Pacific last year, compared to 19% for the world as a whole, he says.

A look at Zenith predictions for global ad spend growth puts Fast Track Asia (China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam), as the region with the highest annual growth over the coming years. This is despite repercussions from a slowdown in the Chinese economy, which has seen growth predictions for this region drop from 11.9% a year between 2010-2015 to 8.5% a year between 2015-2018.

Zenith_Fast Track Asia_ad spend growth 2015-2018_600

The digital age

What does all this mean for traditional publishers?

The Internet remains the fastest growing medium. Zenith predicts Internet advertising to make up 37.6% of all global advertising in 2017, overtaking television to become the world’s largest advertising medium.

“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,” says Barnard. Mobile technology, the rise of social media and online video, and improved advertising technology, such as programmatic buying and local real-time search are all driving this trend. Digital ad spend has grown at an average of 18% a year for the past five years, while ad spend across all other media has grown by just 0.6% a year.

As a result, traditional media owners in the top 30 ranking have been scrambling to scale up their own digital businesses, to various degrees of success, Barnard says.

“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,” he says.

For the time being, names like China’s Baidu and Tencent will be the ones to watch.

*Featured image courtesy Zenith.


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