Per Trefis estimates, Alphabet’s advertising revenues are likely to reach $211 billion by 2022 despite regulatory challenges and increased competition. The growth is likely to be driven by Google’s massive reach, utility value as a free online search provider, quality of search results as well as complementary digital assets (such as YouTube and Android). While regulation may hamper growth in the near term, Trefis estimates that Google’s net advertising revenue could grow at a CAGR of 16% between 2018 and 2024 to reach $243 billion in 2024 from $116 billion in 2018.
Here are some highlights, as per Trefis:
Additionally, Privacy and Business Model changes have changed the dynamics of the global advertising industry in the recent past
2018 has been a transitional year for traditional online advertisers due to privacy-related concerns, with EU and the U.S. either imposing or planning to impose multi-billion-dollar fines on the likes of Facebook and Google.
Other traditional online advertisers have also seen growth cool-off due to a variety of issues including consumption weakness, transitions in business model and geo-political narratives.
Besides Google, the companies that have seen an acceleration in growth are Twitter, Facebook and Microsoft.
Twitter has benefited from its initiatives towards improving platform health like pruning bots and culling fake news with the aim of improving advertiser ROI.
Facebook, despite the Cambridge Analytica scandal, claims to have access to 2.7 billion unique users. While advertisers continue to approach Facebook to benefit from the company’s massive scale, the company has also benefited from WhatsApp's reach as well as from commerce capabilities on Instagram.
Microsoft has been steadily growing its advertising income, as the integration of its different platforms now provides the company with additional analytics ammunition, especially in LinkedIn and Bing.