Which apps will be the next big thing?
- by admin
The rise of the digital ads business will drive an increasingly important debate over which platforms will become the next major business.
The big question: Will they be free?
While it’s been hard to gauge exactly how big the market will grow for ads, a recent study from the research firm Ovum predicted the growth of digital advertising in 2017 would exceed the $2.4 billion that advertisers spent in 2015.
The biggest players, according to Ovum, include the Google and Facebook ad networks, the $1 billion Apple and Microsoft, and Netflix, Amazon and Hulu.
In addition to the big four, there are also a handful of smaller players like Spotify, Adblock Plus, AdWords for iOS and Android, AdSense for desktop and mobile, and others.
Some of these smaller players, which make up around one-third of the ad market, are gaining traction.
But it’s not clear which ones will be able to grow and thrive in a new digital ad world.
As the world becomes more digital, there will be an increasing number of smaller companies, said Daniel Zwiers, director of Ovum’s advertising research.
“What will become more important in this future is the number of platforms that can be developed, the number that can monetize in these new platforms,” Zwier said.
This is why, as of 2017, the ad industry’s share of the market was still at 3% but that was down from a high of more than 6% in 2013, he said.
With that in mind, what will become increasingly important for those smaller players to do is to get as much visibility into the market as possible and to offer ad products to as many users as possible, Zwies said.
For example, Spotify could offer ad-free Spotify Music to those who subscribe to the Spotify music service and also offer ads to users who are on Spotify’s free tier.
But while it’s easy to see how Spotify could compete with other ad networks and offer ad targeting to users on other ad platforms, it’s also unclear how well those ads could compete in an advertising-less world.
The next big questions for these smaller ad platforms are whether they can differentiate themselves from larger, well-known and established players, and whether they will be competitive with other mobile ad platforms that are already there and can provide more value for consumers, such as Facebook and YouTube.
With the digital ad market now dominated by Google, Facebook, and Apple, many observers believe it’s only a matter of time before the giants begin to overtake the rest of the industry.
For many, the biggest question is whether these big players will continue to dominate the ad space for at least another decade, said David DeGraffenreidt, an advertising expert at the University of Maryland.
Google and Facebook already dominate in the mobile ad space and are expected to grow at a rate of more like 10% a year until 2025.
Advertisers will need to invest in their marketing efforts to compete with these two players and the other digital giants, but they are not expected to be able keep up with their growth, DeGraffinsaid.
While AdWords is still popular, many smaller players have already gone digital.
Sprouts and Sproutlight are both digital ads companies and both are growing at a healthy clip.
Spotify has also made some strides.
Last year, Spotify was the fastest-growing digital advertising company in the U.S., according to the report.
However, as the ad ecosystem has changed dramatically, it has become harder for larger companies to get traction with advertisers and users, said Zwieders.
“With the rise of these competitors, it seems that even smaller players will need the support of larger players to continue to compete,” Zweier said of the competition from larger players. For more:
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