Amazon closing in on digital ad market duopoly

  • By Erin Arvedlund The Philadelphia Inquirer
  • Friday, June 14, 2019 9:23am
  • Business

>strong>By Erin Arvedlund The Philadelphia Inquirer

PHILADELPHIA — Advertisers and companies trying to expand their marketing, take heed: There’s a new way to reach customers, starting with something called “advanced television.”

That’s when advertising on television is customized, much like online ads, using consumers’ viewing habits, purchases and location data.

Advanced advertising on TV was one of the insights that the Philadelphia ad agency Harmelin Media shared with clients at a Wednesday event.

“Consumer data is now being matched with viewership data to follow your audience wherever they live,” Harmelin Media’s Dan Cox, vice president and head of planning, told the crowd of about 100 guests at the Barnes Foundation’s auditorium.

For example, cable and satellite providers such as Comcast and DISH network now show highly customized TV ads to one household that owns a cat, while a different ad broadcasts at the same time to a household next door owning a dog, based on credit card data, GPS phone location data, and other tracking data, he said.

Currently, advanced TV advertising is only 3% of the United States’ $70 billion in total ad spending per year, but it’s expected to grow exponentially.

Audio marketing is also changing, with terrestrial radio still accounting for four hours per day of consumers’ time, said Brooke Reynolds, Harmelin media manager. While AM/FM radio accounts for 50% of listeners’ time, online music services such as Pandora and Spotify have grown to 16% of the audio market, she said. Spotify is more popular with the 18-to-34-year-old demographic, while Pandora and its subsidiary SoundCloud are more popular with older listeners.

Podcasts represent only 4% of the audio advertising market, and “it’s been hard for advertisers to break in until recently,” she added. “That said, podcast listeners tend to be consumers with incomes over $100,000 annually.”

Mobile phones, meanwhile, have since replaced TV as the most valuable source of consumer data, said Garry Herbert, associate media director at Harmelin.

“We’re now incapable of giving up our phones, because of the dopamine rush” every time we access them, he said.

For advertisers, this is a bonanza.

“Our phones reveal where we go, what we do, what we buy, how frequently we visit a retailer, and how long we spend buying,” he said.

As a result, even digital billboards are growing, as ad agencies can pinpoint the phone locations of commuters. Advertising dollars spent on digital billboards reached $8 billion in 2018, up 5% from the prior year, said Alison Bolognese, media director at Harmelin.

“Cell phone companies collect this data and sell it so we can plan and measure” who sees company ads, she added. “For example, we can identify people who’ve been to a Wawa in the past three months.”

Among phone apps, five of the top 10 applications are social-media apps, including YouTube, Facebook, and SnapChat.

The over-34-year-olds primarily use Facebook, while 18-to-34-year-olds use Facebook, Instagram, and SnapChat, said Glenn Bernard, associate media director.

YouTube and Facebook now have about the same reach to consumers as TV, he said.

In the Internet search space, Google is far and away the leader, with 81% of search used on all devices. Bing and Yahoo are only in the single-digit percentages.

However, Google is followed closely by Amazon, which many consumers use as a retail search engine for price comparisons, he said.

Finally, voice search is predicted to be a high-growth advertising channel, with 118.5 million active smart speakers now owned by Americans, up from 66.7 million in 2017. Over half of U.S. household smart-speaker owners bought more than one. Amazon owns 65% of the smart-speaker market share.

In digital advertising revenue overall, Amazon “still trails Facebook and Google’s duopoly,” Bernard said, with the latter two giants holding 57.7% of the market in 2018. However, Amazon’s “wealth of consumer data will allow it to contend with the duopoly, turning it into a triopoly.”

Top advertisers with Amazon include Comcast, Progressive, AT&T, Purina PetCare, Geico and American Express.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.