Last week, PMW reported on Emarketer’s predictions that Meta will overtake Google in digital ad revenue this year for the first time. Now, the claim is being challenged.
WPP’s Global President, Business Intelligence, Kate Scott-Dawkins, has urged marketers to look into the data further.
Taking to LinkedIn to question the prediction, she wrote: “The numbers, as reported, simply don't stand up to scrutiny.”
According to WPP’s analysis, Emarketer’s methodology applies an inconsistent standard across platforms, including denigrating Google’s creator and partner payouts.
Speaking in more depth on a Media Intelligence podcast episode with colleagues Jeff Foster and Nidhi Shah, Scott-Dawkins pointed out that the report used net revenue figures as opposed to gross or total, which in turn distorted the companies’ earnings.
The team highlighted the report’s inclusion of Amazon’s content production and what it pays to creators in its reported ad revenue, but exclusion of the same information for Google.
Scott-Dawkins told PMW: “Google remains at the top of our group of marketplace leaders due to the depth and diversity of their data assets, their top-performing AI models, proprietary TPU chips, cloud infrastructure, massive distribution at both the application and hardware level, broad advertiser network, and YouTube engagement engine.
“We currently expect Google's total ad revenue to continue to outpace Meta's ad revenue through 2031 (the extent of our forecast period).”
‘The goal is always to educate and explain, rather than looking for a soundbite’
PMW spoke to Scott-Dawkins about the importance of thinking about and modelling data correctly. She outlined WPP’s own approach in its This Year Next Year (TYNY) forecast.
“In order to compare revenue on as close to an apples-to-apples basis, we make several modelling choices when it comes to how we treat their topline disclosed revenue figures. At the highest level, we want to know what they make from selling advertising inventory to advertisers, and we calculate market share based on that topline figure (congruent with advertiser budget allocations).
“We do exclude some elements – for example, we discount Google and Amazon's disclosed ad revenue to exclude what we believe they make from their ad tech/DSP businesses, as this isn't related to them being a ‘media owner’.
“We do not exclude Traffic Acquisition Costs (TAC) because we don't feel it's representative of their advertiser budget allocation, and then we would have to exclude the same costs from every other media owner (digital and traditional) and that would be quite messy indeed. It would exclude things like what Amazon and Netflix pay to have buttons on remote controls leading directly to their apps (you can think of this a bit like the 'search default' payments Google makes to Apple). And it might mean excluding what companies like Comcast and Paramount pay their content producers for the shows they air – this is akin to the revenue-sharing payments YouTube makes to its creators.
“If we want to make a point about different revenue and profit models across different sellers of advertising, that would be the place and way we would choose to make a distinction between companies that pay significant TAC, and those that don't. But it is never how we think about topline ad revenue or ad revenue share. That is fundamental to how we view our approach to sizing the market and forecasting.
“In everything we do related to TYNY, and any of our other analyses, including the Advertising Intelligence Framework, our goal is to provide our clients, and the industry at large with the most accurate and helpful view of the marketplace so that they can make decisions about future investments.
“We take great pains to interrogate everything disclosed by the companies we track to ensure we maintain consistent definitions and inclusions/exclusions in our reporting. The goal is always to educate and explain why we believe shifts are appearing, rather than looking for a soundbite.
“Using something like the Advertising Intelligence Framework helps with this because it allows us to look at underlying strengths for each company, and how well they are positioned heading into 2030.”
Source: Performance Marketing World
