Advertising makes up 77% of digital media revenues at some of the world’s biggest companies, reports Strategy Analytics.
As one of the fasted growing media revenue channels, beaten only by online games, advertising is on par with video, with both trumping music and content delivery networks.
Business consulting and custom research agency Strategy Analytics analysed revenue trends across music, video, games, social media, content delivery networks and advertising from the quarterly financial filings of the 44 companies. These included the likes of Google, Facebook, music streamer Pandora and Chinese internet security software firm Qihoo.
Both Microsoft’s Online Services and Chinese web service Baidu’s revenue comes 100% from advertising, with ads making up 91% of Facebook’s revenue. Advertising makes up 80% of Yahoo’s revenue, higher than its Japanese arm on 60%.
Sustained Growth
Michael Goodman, director of digital media for Strategy Analytics remarked on the revenue being generated in China, suggesting that companies from the nation may well be chipping away at the power held by their US counterparts.
“Chinese companies have been particularly adept at generating revenues across a variety of services (and) a red-hot Chinese internet market is challenging the historical dominance of US companies.
“Ultimately, this increases revenue per customer, a vital component of sustained growth – Baidu, for instance, has upped ARPU 50% over the last year.”
Baidu is one of the two Chinese firms sitting in the top six companies with the highest media revenues, according to the latest Digital Media Index from Strategy Analytics.
However, Baidu is still behind US companies such as Apple’s iTunes, confirming that the US still holds the reins when it comes to digital media revenues.
Google, which relies heavily on advertising – making up 90% of its revenue – comes out on top for digital media revenue in the first half of this year with $31.4 billion, up 12% year on year (click to enlarge graph).
A full list of the top companies in terms of digital media revenue also makes room for Chinese investment firm Tencent and America’s Netflix among others.