{"id":9392,"date":"2020-11-16T12:00:11","date_gmt":"2020-11-16T17:00:11","guid":{"rendered":"http:\/\/www.newsmediaalliance.org\/?p=9392"},"modified":"2020-11-16T12:00:11","modified_gmt":"2020-11-16T17:00:11","slug":"google-ad-revenue-op-ed-70-percent","status":"publish","type":"post","link":"https:\/\/www.newsmediaalliance.org\/google-ad-revenue-op-ed-70-percent\/","title":{"rendered":"Big Tech Says Publishers Keep Majority of Ad Revenue, But Experience Suggests Otherwise"},"content":{"rendered":"
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metamorworks \/ iStock\/Getty Images Plus via Getty Images<\/figcaption><\/figure>\n

In the June 11, 2019, hearing on the power of platforms and their monopolization of the online news ecosystem, an important question was raised about how much money publishers make off of ads on Google\u2019s platform. Matthew Schruers of the Computer and Communications Industry Association (CCIA) said it was simple: publishers keep the lion\u2019s share of ad revenue funneled in through Google, amounting to 70 percent or more of the total ad revenue. But that truth isn\u2019t quite so cut and dry.<\/p>\n

In 2010, Google publicly disclosed<\/a> how much of the ad revenue they made through their AdSense product was shared with publishers. At the time, publishers were earning 68 percent of the revenue from content ads (the ads you see on a publisher\u2019s website) and 51 percent of the revenue from search ads (ads delivered when consumers used Google Search within a publisher\u2019s site). And while the straight revenue share between Google AdSense and publishers was clearly tilted in favor of the publishers, Google AdSense has become le\u00adss relevant for publishers who sell through Google Ad Manager, an opaque marketplace. And Google benefits significantly more from that relationship than do publishers.<\/p>\n

Google not only dominates the search market, with more than 90 percent<\/a> of all searches occurring through Google or one of its platforms, but it also controls nearly 70 percent<\/a> of the online ad tech market. This overwhelming dominance allows Google to bring in 37 percent of all online advertising revenue in the U.S. It also allows Google to collect the data of the millions of users who search for news content via the platform \u2014 data that the publishers responsible for that news content are unable to access or benefit from.<\/p>\n

When you add in Facebook\u2019s dominance of advertising on the social media end of things, the duopoly takes in nearly 60 percent<\/a> of all digital ad revenue. That leaves only 40 percent for the rest of the internet \u2014 not just publishers \u2014 to fight over. That means that publishers are fighting against such tech giants as Amazon and Twitter, as well as blogs, search engines, and other news sites for the crumbs of revenue left over from the duopoly.<\/p>\n

But that, too, isn\u2019t the entire story. Because Google dominates the online advertising ecosystem, they\u2019re not only making money off the ads placed on publisher\u2019s websites, but from the use of their ad tech in placing the ads.<\/p>\n

In 2017, it was reported that around 55 percent<\/a> of advertisers\u2019 budgets went to paying for the ad tech used to get their ads in front of consumers. That eats into publishers\u2019 revenue, and in 2016, The Guardian<\/em> reported<\/a> that they often saw as little as 30 or 40 cents on every dollar spent to advertise on their site. In the traditional print advertising marketplace, the cut to agencies and \u201cad tech\u201d was much lower, funneling more revenue directly to the publishers.\u00a0 Today, however, the \u201cad tech tax\u201d is eating significantly into publishers\u2019 profits, with the supply-side platforms taking more of the revenue in fees and being opaque about what sort of monetary relationship they will have with their publisher partners. A<\/p>\n

The Association of National Advertisers estimates that, when the \u201cad tech tax\u201d is taken into account, publishers are only taking home between 30 and 40 cents of every dollar, while the Cairncross Review found that publishers get between 43 and 72 percent of revenue generated from ads on publishers\u2019 websites. It is estimated that this \u201cad tech\u201d tax is growing, meaning publishers make less and less profits for the same amount of readers! But these figures are far from transparent, as the only entity that knows exactly how much publishers make on digital ads supplied by Google Ad Manager is Google, a company that is notorious for keeping the public in the dark on their revenue-generating operations.<\/p>\n

More recently, a study<\/a>\u00a0commissioned by ISBA, together with the Association of Online Publishers, found that the programmatic advertising supply chain captures almost half of the advertising spend, with publishers receiving an average of 51 percent. Worryingly, almost a third of the supply chain costs could not be attributed\u00a0according to the study.<\/p>\n

An article<\/a> from Dr. Augustine Fou also noted that publishers are able to keep more ad revenue when they use less ad tech.<\/p>\n

Editor’s Note: This article was originally published on July 1, 2019. It was last updated on November 16, 2020, to add new data from ISBA<\/a>, and again on March 12, 2021 to add new data<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

While the straight revenue share between Google AdSense and publishers was clearly tilted in favor of the publishers, Google AdSense has become le\u00adss relevant for publishers who sell through Google Ad Manager, an opaque marketplace. And Google benefits significantly more from that relationship than do publishers.<\/p>\n","protected":false},"author":6,"featured_media":5397,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"wds_primary_category":0,"footnotes":""},"categories":[1776,642,648],"tags":[192,34,680,401,79,4117,4118,4119,118,121,26,1136,1105],"class_list":["post-9392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-antitrust-digital","category-digital","category-tech-platforms-digital","tag-ad-tech","tag-tag-one","tag-duopoly","tag-facebook","tag-google","tag-google-ad-manager","tag-google-ad-sense","tag-google-adsense","tag-journalism","tag-news","tag-revenue","tag-safe-harbor","tag-tech"],"_links":{"self":[{"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/posts\/9392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/comments?post=9392"}],"version-history":[{"count":0,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/posts\/9392\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/media\/5397"}],"wp:attachment":[{"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/media?parent=9392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/categories?post=9392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsmediaalliance.org\/wp-json\/wp\/v2\/tags?post=9392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}