With multinational technological companies Google and Facebook conquering the field of online advertising revenue, many smaller companies and indie publishers are left wondering where they’ll end up in the digital world – if they’ll end up anywhere at all.
According to data recently released by the Interactive Advertising Bureau, digital advertising revenue in the U.S. increased by 20% in the past year. This puts the American digital ad revenue at a record of $72.5 billion.
Unfortunately for smaller companies, the vast majority of online advertising revenue is coming from tech giants Google and Facebook.
The duopoly of the digital advertising industry
Because the specific ad-only revenues of Facebook and Google aren’t disclosed, the exact calculations of revenue aren’t available. However, Jason Kint of Digital Content Next, a publishing industry trade group, reported in June 2016 that Google and Facebook accounted for a grand total of 89% of the digital ad growth.
Additional calculations made by Pivotal Research analyst Brian Wieser indicate that the percentage of digital ad growth consumed by Google and Facebook may very well be closer to 99%.
In either case, Google and Facebook together are proving to be a concern for the U.S. digital ad market. With Google and Facebook out of the picture of beneficial growth, Wieser said, “the average growth rate for every other company in the sector was close to 0.”
“The big point is that if Google and Facebook are the primary interfaces to buyers, over the long-run they own the relationships and the related data. Every partner they work with is subservient.”
The digital advertising industry controls much of what Internet users see online, which is what helped spur what’s been called the fake news crisis. Both Facebook and Google were allegedly used by a propaganda group called Internet Research Agency based in St. Petersburg to place various fake news articles around Facebook news feeds and above YouTube channel videos.
The power these two tech giants have is reflected in the fact that many marketing agencies are still reluctant to pull their advertising from Facebook and Google despite questions of brand safety, credibility, and ad placement.
“The entire advertising world is very anxious,” said Mike Paul, an independent expert, to NBC News. “But few will admit publicly that the negative news is affecting Facebook because it is the 800-pound gorilla globally for ad and media buyers.”
Regardless of the high rates of success in digital ad revenue, Facebook CFO David Wehner has warned that the company’s own ad revenue growth will slow in the second half of this year. This is because, Wehner says, Facebook will eventually run out of places to set digital advertisements in its online feed.
However, any significant decrease in online advertising revenue is unlikely.
Facebook has been investing recently in video content for both Facebook and Instagram. The company has also been working to increase revenue based on its messaging apps, which are currently the most popular messaging platforms internationally with WhatsApp hosting up to 1 billion users every day and Facebook Messenger hosting 1.2 billion users every month.
What’s more is that Facebook’s ad spots have been increasing in price despite the lack of ad placement options. “As Facebook’s ad inventory becomes more constrained,” said Jan Dawson, a principal analyst at Jackdaw Research, “the price of ad slots on Facebook is going up.”
How publishers can survive in the war for online advertising revenue
With Google and Facebook essentially swallowing the vast majority, if not all, of digital ad revenue growth, publishers have to look elsewhere to earn revenue. Fortunately, publishers have a great place to monetize: Organic traffic.
The secret is well known at this point. Many businesses have experienced substantial growth using organic promotion and search engine optimization. Those who wade into this strategy start by creating very high-quality content and onsite optimization. They soon learn that promotion needs major attention. One specific technical aspect of SEO, backlinking, requires extra special effort.
Getting good backlinks is where many companies hit a brick wall in the SEO process. This is especially true after the Penguin updates of 2013, when many websites saw large drops in rankings as Google “cleaned house” and penalized sites with poor backlink profiles.
The fear of Google’s SEO updates may be valid, and caution is wise, but Google assured us in 2016 that link-devaluing will now be done in “real-time,” guaranteeing that Google won’t build and then destroy a business.
The solution to the “backlinking problem”
The key to growing organic traffic and surviving SEO updates is to promote your website in the most natural way possible. But what does that really mean? Google is notoriously vague on this and issues statements of “intent” in their Webmaster Guidelines. Specifically, your primary intent needs to be providing valuable and informative content to your audience, not manipulating the search engine results.
This means that the quality — and often the quantity — of backlinks are important signals to Google. Google relies on trust. Betraying that trust by taking shortcuts on quality makes your website appear spammy and unhelpful.
To improve your SEO ranking by earning backlinks, consider Google’s official backlink guidelines. Opt out of tactics like using irrelevant keywords, writing scraped or unoriginal content, and using crafty redirects. Instead, consider making your web page user-friendly with high-quality content and don’t try to trick your users.
Build relationships with high-authority websites that will naturally reference each other when publishing. Position your brand as a go-to resource that people want to share with others. If you do outsource link building, be sure you know what they are doing and they meet your standards.
With Google and Facebook consuming nearly all digital ad revenue in 2016, the pressure being placed on indie publishers to find ways to survive in the digital marketing world is cumbersome. And the idea of using organic strategies to promote a business website in the shadow of Google’s success may seem daunting.
But if indie publishers promote their websites using high-quality strategies as well as by following Google’s guidelines, they will have little fear that Google will bring the hammer down.
Digital ad revenue may not be as high for indie publishers as it is for Google and Facebook, but the chance of survival in the digital world for these publishers isn’t completely lost as long as they heed Google’s guidelines.