Small Companies Bagging Charts, Google and Facebook Maintains the Duopoly: Singular ROI Index 2020

The dotcom bubble that surfaced during the mid-90s paved the way for print publishers to pursue display ads. Ever since then, the ambit of Ad network has been bloating, capturing novel advertising possibilities.

An ad network is a company working as a middleman for advertisers to publish advertisements on websites. It mediates the ad inventory’s sales among publishers and advertisers. In layman’s terms, an ad network acts as a broker, acquiring a large volume of publishers’ impressions and then making them available for sale to advertisers.

The time when ad networks started gaining momentum, the hunch concerning the right and optimized way of harnessing the potential of online advertising intensified. Advertisers were aimlessly placing ads on the abundance of space available on websites, rather than reaching out for target consumers. However, the data explosion weaved a hornet’s nest for a number of sites and digital publishers, compelling them to take the proverbial ostrich head out of the sand and seek a concentrated way to boost inventory demand and ad revenues. That’s when targeted advertising cropped up in the view.

Online ads have matured over two decades by dint of a sheer number of networking approaches — from obnoxious pop-up ads to targeted advertising strategies.

Ethan Zuckerman, the one who created the first pop-up ad, is now embarrassed about his invention. “I’m sorry,” said Ethan Zuckerman, while writing for The Atlantic in 2014. “Our intentions were good,” he added.

The most preferred ad networks offer the best return-on-investment (ROI). Singular, a marketing intelligence company, assesses the ROI for mobile and networks. The company rolls out a report every year called Singular ROI Index. And the Singular ROI Index 2020 revealed some astonishing insights about ad networking space.

In the Singular ROI Index 2020, the following parameters have been analyzed:

  • USD 6.3 billion in ad spend — Since the advent of 2019, a considerable fraction of close to $10 billion in marketing spend that Singular optimizes for global brands annually.
  • 2.2 billion app installs — USD 6.3 billion picked up around 2.2 billion app installs. Again, a considerable fraction of the total installations that Singular measures for clients.
  • 550 ad networks — Singular asserts that they have tightened their sights this year. Rather than analyzing every single one of the 1000+ media sources that Singular helps marketers optimize, they narrowed the focus to networks.

Highlights of the Singular ROI Index 2020:

  • TikTok on the rise
  • Google and Facebook to remain at the vanguard
  • The unprecedented potential of small ad network companies to outrival giants

Phenomenal Performance by TikTok: Too Good to be True

The exponential rise of Tiktok’s ad spending rate is a newsworthy insight. TikTok took a quantum leap in terms of ad spending by 75x from May to November. It grabbed 614 million users in 2019, closing in on a whopping user-base of 1.5 billion. This massive base enables the company to leverage on monetization opportunity. TikTok just shows up on 2 of the 12 top charts of the Singular ROI Index 2020, and that is because they only have started off. As a matter of fact, the ad spends on the platform stayed dormant until August. Thereupon, the TikTok’s ad spending has been skyrocketing, breaking off the fixed notion that just giants can make unprecedented strides.

The average users spend around 50 minutes daily on TikTok, meaning the platform is catching an enormous share of its users’ time and is not just spiraling pretentious download metrics.

The considerable user time and installations registered by TikTok underpins its promising ad revenue generation appetite.

Google and Facebook Leads the Ad Networks Space: Too Big to Ignore the Duopoly

Google and Facebook stay at the vanguard of ad networking space — the giants have cemented their position in the online advertising industry, with 10x to 20x the reach of other players, capturing 20x to 100x smaller players’ spending. Close to 3 million businesses advertise on Facebook, whereas 1.5 million businesses are advertising through Google AdWords.

Not just online advertisements, these giants have their roots entrenched in a variety of areas. The widespread reach and brand image allow them to procure tangible results.

On the flip side, another giant Amazon seems to be nowhere in the ad networking space. The fundamental reason behind this is plain — Amazon’s ad division exerts emphasis on retail sales than mobile app installs. So, despite Amazon’s advertising division tripling its size over the last few years, it has not made the appearance on the leaderboard yet.

Small Companies Racing With the Giants: The Rising Oligopoly

Small companies, not literally small as they have employed and raised the revenue consisting of some astounding numbers, have proved their potential. In that case, a better euphemism would be: in comparison with Google and Facebook, they are not big. IronSource, Aarki, and Vungle, and Tapjoy are some of the not so big companies that appeared in most of the lists by Singular ROI Index 2020.

These companies recur on regional ROI lists as well, alongside Unity, Vungle, and Fyber. This reappearance hints that following the beaten path is not always the right thing to pursue. For example, Vungle raised only about USD 25 million before getting acquired by Blackstone, a private equity group, appears on eight lists. IronSource shows up on nine leaderboards, whereas Tapjoy is on seven.

All of the findings center around the one and the same thing — not so big companies have proven themselves with delightsome results — and the best returns have been gleaned from some of the not so big sources.

If all the customers are from Facebook or Google, ultimately, the algorithm that decides which ads to display will leave no room for those customers to stand out uniquely. And consequently, the end result will tend to be average. Therefore, niche players are crucial in driving unique results in the ad networks space. Also, the Singular ROI Index 2020 has shown that these niche players have impressive ROI; marketers who have not followed the same path and experimented on the farther side of popular ad networks . Besides, TikTok and Amazon have displayed remarkable growth prospects, which will turn them from niche to core shortly.

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