Why are Google, Facebook and Amazon the world's biggest companies?

12/12/2018

I've been writing a reply to Jim Murray's most recent broadside about digital marketing in his latest piece. The scope of the comments section doesn't give me the space to write a more complete answer. So, I'm re-posting my threaded reply here instead.

My first thought is that is Jim is 180° off in his characterization of why P&G are moving their ad spend away from big agencies. Jim contends that...(in reference to why content marketing is koolaid).

Here is the full quote:

"P&G's $200 million digital cut were reinvested into areas with "media reach" including television, audio and ecommerce. During a speech at the Association of National Advertisers in Orlando, Fla. today, CMO Marc Pritchard declined to name specific companies where the ads were pulled from but said that it reduced spending "with several big players" by 20 percent to 50 percent. He added that the cuts helped P&G eliminate 20 percent of its ineffective marketing and increase reach by 10 percent."

"This new level of transparency is shining the light on what's next-marketers taking back control of our own destiny to accelerate mass disruption-transforming our industry from the wasteful mass marketing we've been mired in for nearly a century to mass one-to-one brand building fueled by data and digital technology," Pritchard said in a transcript of prepared remarks."

https://www.adweek.com/brand-marketing/when-procter-gamble-cut-200-million-in-digital-ad-spend-its-marketing-became-10-more-effective/The context is entirely the opposite of what Jim implies. P&G are moving money away from the Big Agencies because they no longer supply the access to market the P&G brand needs.
In essence they spend so much money they're asking for transparency and more quality from their outsourcing partners, they're looking to get "value for money." Their prime concern is that they spend too much as the biggest player and want to drive down the margin, like large supermarkets and their suppliers.

If you're not working to an agenda, it is easy to see the main point. They want to go direct to their main advertising partners, as the following quote from the same article shows.

"...When a PR disaster around Tide Pods began brewing on digital platforms (where consumers eat the laundry detergent packets as if they were candy), Pritchard said he was impressed with YouTube, Facebook and Snapchat's response.

"Within a matter of hours, [YouTube CEO] Susan [Wojcicki]'s team swept the entire YouTube platform clean of these dangerous videos and changed the algorithm to ensure Tide's safety video reached anyone searching for this unsafe behavior," Pritchard said in the transcript. "Within minutes of contacting them, Carolyn Everson's Facebook team, and Imran Khan's Snap team did exactly the same. This not only reflected the right attitude, it demonstrated that the work over the past year gave them better control over their platforms."
https://www.adweek.com/brand-marketing/when-procter-gamble-cut-200-million-in-digital-ad-spend-its-marketing-became-10-more-effective/

Aside from the speed at which YouTube cleaned house (OK, no more P&G related puns), you can see what the benefits are to the big players. Direct action and access - what's not to like.
Tech is the new establishment and "old media" is being displaced. In fact, Jim fairly represents the failure of old media; the inability to keep current, report facts and retain objectivity.
So what is the new normal?
A 20 year old company is the biggest company in the world. Advertising is now essentially their game. People like Jim &Co. don't want to get that idea. They'll try very hard to be blind to the facts, but those are quite apparent, even to the naked eye.

Nowadays people use phones to access google (to get info), to connect with their peers on Facebook(social network) and use Amazon (to buy things). That is the key dynamic.

Mobile devices that connect to the internet are ubiquitous.More so in developing countries and those countries that are not connected to wired networks running along the traditional hub and spokes route.

Marketing follows the audience. The marketing money now goes to Google and Facebook in a way that creates a huge duopoly, with Amazon tagging along behind. All are commercial entities that have displaced traditional players.

Advertising budgets have migrated.

Content is a key element to Google's search criteria.

Content is based on the process of searching for "keywords and key phrases"from reliable sources.

This drives the new market - it is a very clear process indeed.

A corollary to this is new marketing."on the surface," offers far more transparency than the old agency structure. My own view is that is increasingly a false narrative, but the basis for that is a much longer (and more detailed ) exposition.

In essence Jim is just propagandizing a false narrative...in Ireland we'd call it bull****.

I run part of a 5k -10K per month ad budget (not as big as P&G granted). It goes to; {in order} ...FB, Amazon (sponsored), Google adwords, content (meaning image, video and text) and email. We've done one print run (Audi driver + VW driver magazine in the UK) this year for Christmas.

I follow the numbers, so does the boss - we're not throwing cash down the drain (very last P&G pun), we're quite frugal, in fact. He said to me recently he spent 500k on Amazon fees alone. My previous boss paid 20k to Linkedin for recruiter licences. I've worked with an owner operated business that did over 1m USD of business on Google Adwords in multiple years. All of these guys make a profit. Black is the new black.

I'll show you our numbers after the holidays, then you can ask who has been telling porky pies.

REF:

https://www.investopedia.com/news/facebook-google-digital-ad-market-share-drops-amazon-climbs/

https://www.investopedia.com/news/facebook-google-dominate-mobile-ad-spending-hits-record-high-goog-fb/

" A good example of this is Procter and Gamble, which last year cut their digital marketing budget by about 75%, citing lack of performance."
www.bebee.com/producer/@jim-murray/content-marketing-is-not-everybody-s-glass-of-koolaid