Advertising revenue: Difference between revisions
m Bot: link syntax |
No edit summary |
||
| Line 3: | Line 3: | ||
[[File:YouTube monetization.png|thumb|YouTube monetization (logo) - One of the most prominent sources of advertising revenue online]] |
[[File:YouTube monetization.png|thumb|YouTube monetization (logo) - One of the most prominent sources of advertising revenue online]] |
||
'''Advertising revenue''' is the monetary income that individuals and businesses earn from displaying paid advertisements on their website, [[social media]] channels, or other platforms surrounding their internet-based content. In September 2018, the [[United States|U.S]] Internet advertising market was estimated to be worth $111 billion with market share held mostly between the major technological enterprises of Google, Facebook, Amazon and, Microsoft.<ref>{{Cite web|url=https://www.bloomberg.com/news/articles/2018-09-19/amazon-increases-ad-market-share-at-expense-of-google-facebook|title=Amazon Increases Ad Market Share at Expense of Google, Facebook|last=Soper|first=Spencer|date=19 September 2018|website=Bloomberg|archive-url=|archive-date=|dead-url=|access-date=}}</ref> These major enterprises make money themselves through [[online advertising]] but also have initiated pathways for individual users and influencers to earn an income. |
'''Advertising revenue''' is the monetary income that individuals and businesses earn from displaying paid advertisements on their website, [[social media]] channels, or other platforms surrounding their internet-based content. In September 2018, the [[United States|U.S]] Internet advertising market was estimated to be worth $111 billion with market share held mostly between the major technological enterprises of Google, Facebook, Amazon and, Microsoft.<ref>{{Cite web|url=https://www.bloomberg.com/news/articles/2018-09-19/amazon-increases-ad-market-share-at-expense-of-google-facebook|title=Amazon Increases Ad Market Share at Expense of Google, Facebook|last=Soper|first=Spencer|date=19 September 2018|website=Bloomberg|archive-url=|archive-date=|dead-url=|access-date=}}</ref> These major enterprises make money themselves through [[online advertising]] but also have initiated pathways for individual users and influencers to earn an income. Individuals and businesses can earn advertising revenue on their website with by using an ad network like [[Google AdSense]] or [[Outbrain]]. |
||
== Overview == |
== Overview == |
||
Revision as of 22:20, 26 June 2019
 | This article needs additional citations for verification. (June 2019) |
Advertising revenue is the monetary income that individuals and businesses earn from displaying paid advertisements on their website, social media channels, or other platforms surrounding their internet-based content. In September 2018, the U.S Internet advertising market was estimated to be worth $111 billion with market share held mostly between the major technological enterprises of Google, Facebook, Amazon and, Microsoft.[1] These major enterprises make money themselves through online advertising but also have initiated pathways for individual users and influencers to earn an income. Individuals and businesses can earn advertising revenue on their website with by using an ad network like Google AdSense or Outbrain.
Overview
There are a variety of methods and providers which individuals and online organizations can use in order to earn monetary income in the form of advertisements accompanying their website or digital media content. Digital technology giants such as Google, Facebook, YouTube, Amazon, and Microsoft allow website owners and content creators to display advertisements with their online media and receive income that is generated from the parties which pay to advertise on any given site.[2][needs copy edit] Individuals and organizations can earn a significant income from ad revenue as paid to them by the major media sites. In 2018 it was reported that major YouTubers stars such as Jake Paul and Pew Die Pie each earned more than $10 million through monetizing their online video content.[3] Revenue earned by individuals and organizations from online advertisement sources is considered taxable in multiple countries. In 2015, the Australian Taxation Office confirmed questions regarding the tax status of online Ad Revenue stating that it was taxable and content creators should be considered “performing artists”.[4] Also, in the United States, the Internal Revenue Service deems online ad revenue to be taxable. For those earning income from technology platforms controlled by Alphabet Inc., which includes Google and YouTube, a Form 1099 will be issued by the company if an individual or group earns more than $600 per year.[2] The ad revenue industry is not without controversy. Ad blocking technology has proven to be an issue for technology giants and individuals looking to earn money by displaying advertisements alongside their content. Ad blocking software is reportedly used by 17% of people aged 18–34 and allows users to block advertisements while visiting a given website, thus removing the possibility that a user will click on a given advertisement.[5]
Notable platforms
Google is one of the largest online advertising platforms in the world, and as of March 2019 is estimated to facilitate more than 90% of global searches.[6] Since October 2015, Google and its online advertising branches have existed under the structure of an American multinational holding company known as Alphabet Inc. Google co-founder Larry Page has stated that this move was made in order to allow Google and other Alphabet Inc. subsidiaries to operate more independently and efficiently.[7] The company's digital advertising revenue figures were approximated at around $39.92 billion U.S. in 2018 and between itself and another online giant Facebook, is reported to control just under 60% of the U.S. online marketing space.[8] A significant area of Google's online advertising platform comes from their Google AdSense program which allows website owners to display Google-driven advertisements on their site. As customers click on the ads, Google makes money from the advertising company, passing on 68% of that money to the person who owns the participating website and keeping 32%.[citation needed] As of January 2018, online advertising accounted for 84% of Alphabet Inc’s revenue. The advertising system they have created provides significant revenue for themselves but also for individual's and smaller companies who are actively participating as partners in Google's network.
YouTube
Another online advertising giant which falls under Alphabet Inc's control is video sharing website YouTube. Google bought YouTube for $1.65 billion in 2006[9] and as of 2015, Bloomberg estimated it to be worth approximately $70 billion with an average daily visitor amount of over 30 million.[10] YouTube allows content creators to share as well as monetize their own videos on the site and in certain cases will pay them a percentage of the advertising revenue received by the company for adverts which are placed within and around videos. The approximate share of advertising revenue paid to those making the monetized videos is reported to be 55% and in 2013 the average earnings of individual YouTube content creators were estimated to be $7.60 per thousand views.[2]
 | This section may require copy editing. (June 2019) |
Facebook is also one of the largest online advertising platforms and as of March 2018 was estimated to hold a combined market share with Google of just under 60%.[8] In the last quarter of 2018, Facebook stated that its online advertising revenue was $16.9 billion. Facebook allows businesses to advertise throughout its website, using its in-depth knowledge of user demographics and interests to ensure that a given advertisement has a good chance of reaching its specific target audience. As Facebook users click on the advertisements visible on their profile or timeline, Facebook charges the advertising company a fee, “cost per click”. Facebook also allows businesses to increase the visibility of their posts beyond those who follow or like them and charges a certain amount for amount of people the post reaches.[11] In terms of how Facebook allows for businesses and individual users to make money themselves through advertising initiatives, ‘Facebook Ad Breaks’ allows users to earn revenue from advertisements that play during their own video content on the site. The videos must be at least three minutes long, with the advert not showing until at least the end of the first minute.[12] Early testing of this platform by some users has indicated that not all viewers are watching the videos long enough to become monetized viewers and thus the potential revenue has been judged as low.[13]
In 2012, Facebook purchased the image-sharing application known as Instagram. At the time of purchase, Instagram had more than 30 million downloads and cost Facebook $1 billion to buy.[14] As of 2019, Instagram has over 1 billion monthly active users and is estimated to be worth more than $100 billion.[15] Within the application, Instagram allows individuals and businesses to advertise image and video content in front of potential customers within their target demographic.[citation needed] As well as targeting the appropriate demographic through its knowledge of those using the application, Instagram allows advertisers to direct potential customers through to outside websites, download content and to shop within online stores.[citation needed] Customers pay several dollars for every thousand users which see their advertisements and it is predicted that Instagram will earn more than $10 billion from this service annually as it moves through to the end of 2019.[15] This revenue figure makes Instagram responsible for approximately 17% of the total online advertising income of its parent company, Facebook.
Amazon
As of 2018, Amazon was reported to be the third largest online advertising platform and saw predicted advertising revenues sit at above $4 billion.[16] With a reported 197 million unique online visitors per month to their site, Amazon has a large customer reachability[needs copy edit] similar to the larger advertisers of Google and Facebook.[17] Amazon currently allows its users to pay to have their products made more visible on target customer's screens and also allows for sellers to act as affiliates, being paid a commission of up to 15% for each time they refer someone.[citation needed] As of May 2019, Amazon is attempting to expand its affiliate advertising program by partnering with other large online media agencies and heavily trafficked websites. Amazon has reportedly reached out to online media giants Buzzfeed and The New York Times with an offer that would see them being paid in order to recommend or advertise products on their site.[18] Such advertisements would include a link to the Amazon page where a potential customer could buy the product and in return, the media agencies would receive a percentage commission of the purchase.[18]
Microsoft
In 2018, the U.S. online advertising market was reported to be worth $111 billion of which Microsoft has approximately 4%.[16] Microsoft, which owns search engine Bing and social media site LinkedIn, earns advertising revenue through programs such as Bing Ads.[19] Bing is estimated to facilitate just above 6% of Internet searches.[16] Businesses and individuals can pay to have their advertisements displayed to customers on each platform. Bing's web publishers program allows website owners to earn advertising revenue by displaying Bing advertisements on their sites.[20] Microsoft also earns ad revenue through its sites. LinkedIn allows individuals and businesses to pay in order to have image and video ads displayed to demographics they wish to target.[21] Each time a LinkedIn user clicks on one of these advertisements, the company is paid between $2–5.[citation needed] LinkedIn has more than 500 million users and in 2018 it was announced that they expected to earn approximately $2 billion annually from ads on the platform.[22]
Issues
Tax implications
Revenue earned by individuals and organisations as a result of participating in online advertising programs such as Google AdSense and YouTube Monetization may face different income tax requirements based on location. In 2015, the Australian Taxation Office outlined that anybody earning income from online advertising would be classed as a performing artist and be required to pay income tax.[4] Under the Australian Taxation Office guidelines, a performing artist also includes other professions such as singers, dancers, or a similar person who is using their own intellectual or entertainment related skills.[23][needs copy edit] Specifically related to online advertising income, the Australian Taxation Office said that any income that an individual receives from online advertising is a reward for providing services based on their activities as a special professional and therefore can form part of the taxpayer's assessable income.[4] In the United States, the Internal Revenue Service also deems online advertising income to be taxable for individuals.[24] For example, those in the United States earning ad revenue from technology platforms controlled by Alphabet Inc. will be issued a 1099 tax form directly by the company if the income is more than $600 per year.[2]
Ad blocking
Ad blocking refers to the use of various computer applications or programs to remove all online advertisements.[25] This technology can prevent content creators and website owners from earning revenue from those customers who use ad blocking software. One Wall Street Journal survey found that 17% of users aged 18-34 used ad blocking technology and thus prevent any “pay-per-click” advertising, as used by the major platforms, to be fully used.[5] There has been support for ad blocking software from major technology companies such as Google. In 2018, Google announced that it would be launching ad blocking type software within its Chrome web browser aimed at targeting websites or advertisements that are designed to disrupt user experience and do not allow for users to dismiss them before a certain time has elapsed.[26] After Google notified potentially impacted websites of the changes, approximately 42% made preemptive changes to ensure that they were compliant with the new advertising user guidelines. Under the current protocol, any site that does not comply with Google's user guidelines will be contacted and given 30 days to resolve the advertising issues before further action is taken. Google has announced that its ad blocking technology will be available to users of their search engine without downloading third-party applications or installing any external software.[26]
See also
References
- ^ Soper, Spencer (19 September 2018). "Amazon Increases Ad Market Share at Expense of Google, Facebook". Bloomberg.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b c d Rosenberg, Eric (October 7, 2018). "How YouTube Ad Revenue Works". Investopedia.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ O'Kane, Caitlin (December 4, 2018). "Top 10 Highest Paid YouTube Stars of 2018". CBS News. Retrieved 24 May 2019.
- ^ a b c Papadakis, Marianna (20 January 2015). "Tax Office determines YouTube income as taxable". Australian Financial Review.
- ^ a b Stewart, Duncan (3 April 2018). "Are Consumers 'Adlergic'? A Look at Ad-Blocking Habits". The Wall Street Journal.
- ^ Capala, Matthew (27 August 2018). "Global Search Engine Market Share for 2018 in the top 15 GDP Nations". Alphametic.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Hartmans, Avery (12 July 2018). "The company formerly known as Google is far bigger than most people realise". Business Insider. Retrieved 24 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b Bruell, Alexandra (19 March 2018). "Rivals Chip Away at Google's and Facebook's U.S. Digital Ad Dominance, Data Show". The Wall Street Journal.
- ^ "Google Buys YouTube for 1.65 Billion". NBC News. 10 October 2006. Retrieved 23 May 2019.
- ^ Geier, Ben (27 May 2015). "YouTube Worth $70 billion for Google, Bank of America Analyst Says". Fortune Magazine. Retrieved 22 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Henderson, Gary (29 June 2018). "How do Facebook Ads Work?". DigitalMarketing.org.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Patel, Sahil (13 July 2018). "Facebook's Video Ad Program is Showing Signs of Life". Digiday UK.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Patel, Sahil (2 October 2017). "Facebook's Key Video Ad Program Isn't Delivering Much Money to Publishers". Digiday UK.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Rush, Dominic (10 April 2012). "$1b deal: Facebook buys Instagram mobile photo-sharing app". Sydney Morning Herald. Retrieved 23 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b McCormick, Emily (26 June 2018). "Instagram is Estimated to Be Worth More Than $100 Billion". Bloomberg. Retrieved 24 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b c Catalano, Frank (19 September 2018). "Amazon to Move Past Microsoft for No. 3 Spot in Advertising Revenue, New Study Finds". Geek Wire.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ "3 Reasons to Sell Amazon". American Marketing Association - University of Wisconsin Whitewater. 1 December 2018.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b Kafka, Peter (6 May 2019). "Amazon wants to pay the New York Times and Buzzfeed to expand so it can reach more shoppers outside the US". Vox. Retrieved 24 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ "Microsoft Advertising". Bing Ads Microsoft. 2018. Retrieved 27 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ "Web Publishers: Contextual Ads". Media.net. 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Ward, Ashley (7 February 2019). "How to Advertise on Linkedin in 2019: A Beginner's Guide". Search Engine Journal. Retrieved 24 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Johnson, Lauren (13 November 2018). "Linkedin hits $2 billion in Ad Revenue, best on video". Business Insider. Retrieved 24 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ "Performing Artists". Australian Taxation Office. 14 March 2018. Retrieved 28 May 2019.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ Edwards, Jim (4 August 2015). "The Biggest Stars on YouTube Make Huge Incomes Yet They Can't Keep the Vast Majority of it". Business Insider.
- ^ Zajechowski, Matthew (November 2016). "Ad Blocking and Its Effects on Advertisers and Publishers". Relevance.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help) - ^ a b Finley, Klint (16 February 2018). "Google's New Ad Blocker Changed the Web Before It Even Switched On". Wired.
{{cite web}}: Cite has empty unknown parameter:|dead-url=(help)