Which BigTech Company is Scaling Advertising the Best?
At the Last Futurist we spent a lot of time thinking about the future of apps and the internet. We know Earnings have been incredible for Silicon Valley corporations, but we wanted to know who is growing their digital Ad revenue the fastest at this point in 2021. Here is what we found:
Amazon’s ads business is generating nearly $7 billion a quarter, and growth is accelerating
- Amazon’s “Other” unit, which is primarily made up of advertising but also includes sales related to its other service offerings, brought in more than $6.9 billion in the first quarter, growing 77% year over year.
- According to Reuters, the tech company is on track to make at least 180 billion yuan (or $27.2 billion) in annual advertising revenue, making up the bulk of its $30 billion revenue goal for 2020. It’s second in China only to Alibaba. It relies on Douyin, the Chinese version of TikTok, for nearly 60% of ad revenue, followed by news aggregator Jinri Toutiao for 20%.
- In its first-quarter earnings report Tuesday, Google parent company Alphabet said YouTube brought in revenue of $6.01 billion in advertising revenue during the quarter — up from $4 billion from a year ago, for a growth rate of 49%. This means YouTube could one day bring in as much revenue as Neflix, according to CNBC’s Elias who was brought in to be critical of Google.
- Snap expects year-over-year revenue growth of 80% to 85% for the second quarter, Snap Chief Financial Officer Derek Andersen said in prepared remarks. However this like Pinterest, is of a much smaller scale where Snap total rev were just $770 million.
LinkedIn by Microsoft
- Microsoft said Tuesday that LinkedIn Marketing Solutions has brought in more than $3 billion in revenue in the past 12 months. Revenue is accelerating as that amounts to over 60% year-over-year.
- The company reported revenue of $485 million for the quarter, which was up 78% compared with a year prior. It’s not as high as analysts were expecting though the growth remains strong. Pinterest also provided a Q2 revenue growth estimate of 105% year to year.
- Not to be under-estimated, in the first quarter of 2021, Facebook grew revenue by a stunning 48%, with ad revenue up 46% and “other” revenue up 146%. This led to a stunning operating-income growth of a 93%. Considering Facebook is a pure play digital advertiser, that’s a blockbuster beat. The company attributed its massive revenue growth to a 30% increase in the average price per ad, as well as a 12% increase in number of ads shown.
- With its momentum change, Apple begins to sell Ads in its App-store. Apple’s privacy attack on Facebook benefits its walled garden services platform that can introduce Ads in a smarter way. Apple’s Ad revenue is thus projected to be among the fastest growth YOY in 2021 by us.
The pandemic was just an incredible boom for advertising for these major corporations where digital Ads represents a significant cash-cow. We think Amazon, Snap and ByteDance are the big winners but all of them did so well and are at different maturity curves so it’s tough to call just based on these numbers.