Tag Archive: Big Tech

  1. Meta versus TikTok: the battle for our attention

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    For years, Facebook and Instagram have dominated our social media lives and, indeed, how we behave and interact across the internet. Facebook Meta has come to shape our online lives, and its influence is so vast that bodies such as the European Union and the US congress spend huge amounts of time and money working out how to exert control over it. But for all Meta’s dominance of our time and attention – and the ad dollars of millions of advertisers worldwide, its confidence appears to have been wobbled by an ‘upstart’ – TikTok. The Chinese-owned video-sharing platform soared in popularity during the pandemic and has morphed from a lip-synching and dancing app to one that creates trends and forges deep connections between creators and users, keeping the latter engaged video after video. And now, the cracks are starting to show at Facebook, which has just reported its first-ever decline in daily active users (DAUs). The battle between Meta and TikTok is on.

    Meta – the reigning monarch

    Facebook’s dominance of the social media industry is still undisputed. In Q4 of 2021 it boasted 2.9bn monthly active users – not far off half the Earth’s population. Meta, Google and Amazon together accounted for more than 74% of global digital ad spend in 2021 – which is more than 47% of all money spent on advertising in that period. Meta’s share of the digital ad market is 23.8%.

    But there are signs of trouble ahead for the social media giant – and signs that it is nervous too. It is facing a challenge in terms of both user numbers and advertising, reporting their first-ever quarterly decline in DAUs in the fourth quarter of 2021. Facebook lost around 500,000 daily users in the last three months of 2021. The number of monthly active users on Facebook stayed relatively flat, while growth across Meta’s other platforms – WhatsApp, Messenger and Instagram – was modest. Furthermore, Buzzfeed found that audiences are spending less time on Facebook. This decline in time spent on Meta’s platforms puts direct pressure on ad spend. That pressure is exacerbated by the economic pressure that many small businesses are facing as the world emerges from the Covid-19 pandemic; these small businesses make up a large part of Meta’s advertiser base and, if they are having to cut down on their ad spend, Meta’s ad revenue will inevitably suffer. Insider Intelligence has lowered its forecast or Meta, predicting that the company’s revenue will decrease by $2.5 billion in 2022 and 2023. The company’s share of digital ad spend will fall under 22% by 2023 – down from 25% in 2020.

    TikTok – the pretender to the throne

    The fact is, those daily users and ad dollars are going somewhere. In a rare direct nod to competition (quite possibly because of the various antitrust lawsuits that Meta is facing), Mark Zuckerberg emphasized the threat Meta faces from platforms such as TikTok and YouTube, as people are increasingly drawn toward short-form video content.

    YouTube has been big for a long time, but TikTok’s ascendancy over the last few years has been meteoric. It got its billionth user in 2021, just four years after its global launch; that’s half the amount of time it took Facebook, YouTube or Instagram, and three years faster than WhatsApp. TikTok was the world’s most downloaded app in 2020, and in 2021 it became the first app not owned by Meta to cross the 3 billion app download mark. Also in 2021, the typical TikTok user spent an average of 19.6 hours on the app every month – more or less equalling Facebook.

    And it’s not just user figures that suggest that TikTok is the one to watch. It is also the most lucrative app globally for in-app purchases. Users spent $850 million on TikTok’s virtual ‘Coins’ currency in the first quarter of 2022. What’s more, the company’s unique approach to social commerce, which involves pairing marketers with content creators, drives huge demand for products: the #TikTokMadeMeBuyIt hashtag has had over 11.5 billion views.

    All this is propelling TikTok’s ad revenue: in 2022, it is expected to bring in $11.64 billion – that’s triple its 2021 figure and more than Twitter ($5.58 billion) and Snapchat ($4.86 billion) combined. It’s still small in terms of share of the digital ad market – but Meta evidently still feels threatened.

    Meta and TikTok: A play for the crown

    TikTok’s huge growth in the last few years, its clever social commerce strategy and the fact that it is winning the battle for the hearts, minds and attention of under 25-year-olds (and indeed under-18s) – which happens to be where Facebook is suffering its most significant declines – means that Meta is paying attention and reacting accordingly. The tech giant needs to maintain its ad revenue until the metaverse – into which it has invested heavily – takes off (if it takes off). It does not want an ‘upstart’ like TikTok snapping at its heels.

    Meta’s reaction to the TikTok threat seems to be “if you can’t beat ‘em, join ‘em”. Its Reels product is a direct rival to TikTok’s short-form video format. Mark Zuckerberg admitted in an earnings call that Reels is a major part of Meta’s TikTok defence strategy. They are also exploring the introduction of virtual coins on Facebook and Instagram, nicknamed ‘Zuck Bucks’. It is, however, interesting that Meta’s investment in these projects has been limited – especially given that Zuckerberg has form for investing in projects that he does believe in, such as the metaverse.

    However, Meta is not just using product innovation or imitation in order to keep the TikTok threat at bay. It was revealed recently that it hired a Republican consulting firm in the US to seed public distrust around TikTok. Op-ed and letters to the editor in various local publications have expressed concern that TikTok poses a danger to American children – particularly in relation to the fact that it is Chinese-owned and holds an extraordinary amount of data on teenagers across the world. Meta has defended the campaign and its actions, saying that it believes that all platforms should face scrutiny consistent with their size and success. The eagle-eyed have noted, however, that the thought-pieces in question have criticized trends that have gone viral on TikTok – but originated on Facebook and Instagram.

    The political angle

    Given Meta is a huge American tech company, and TikTok a huge Chinese one, it’s impossible to discuss this matter without touching on global politics. There is a tendency in the West to see the West as a bastion of democracy, free speech and freedom – and to see the ‘rest of the world’ but particularly China and Russia as restrictive, non-democratic and, in the case of Russia, outright aggressive. The fact that TikTok is Chinese owned may well have an impact on its future in the West. The app is already banned in India, and many other countries have considered banning it; the Trump administration in the US toyed with the idea of forcing the sale of the American business to an American company, but this idea was dropped after Trump lost the 2020 election. TikTok collects an enormous amount of data – it is, for example, using facial and voice recognition, even in the US. The fear is that the governing Chinese Communist Party (CPC) will use this very private data to its advantage – and given that they are closely involved in all major Chinese companies, it’s naïve to believe they are not doing this.

    That said, the West also has access to a staggering amount of data. The US can access all data that passes through servers in the US, and the data offered by data brokers from cookie and app data gives anyone who wants it far more intelligence on our behavior than we could reasonably expect them to have – and both the West and the East can use and abuse that data.

    These data flows are likely unsustainable in the long-term – individuals and regulatory bodies will demand more privacy in the future, even if market changes are slow to catch up. We are already seeing increased scrutiny on Meta in the US, the EU and beyond – TikTok will undoubtedly not be immune to it.

    So – is the future TikTok’s?

    While Meta is still by far the biggest social media company, and has a huge percentage share of the digital ad spend market, dwarfing TikTok’s, it is obviously flustered by TikTok’s success, especially when compared to its own stagnating and even declining figures. Facebook has more users, but TikTok has the attention of the demographic that advertisers most want to target and form a relationship with. Both companies will continue to be scrutinized for how they handle data and privacy – we all know the level of scrutiny that Meta faces, and TikTok – being Chinese-owned – will need to get used to a similar level of enquiry.

    For the last couple of decades, Facebook has had huge influence on how people across the world behave on the internet and even off it. It has changed how we interact, how we discover news, brands and products, even how we speak. But with young people devouring short-form video, interacting with creators and buying socially, it looks like the next two decades could well belong to TikTok. And marketers – particularly, but not exclusively, those who want to target a younger audience – should make plenty of space in their marketing plans for the Chinese-owned platform.

    Header image: Kaspars Grinvalds/Shutterstock

  2. Clear history: Google confirms its plans to kill the cookie

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    In a blog post released on March 3rd, David Temkin, Google’s Director of Product Management, Ads Privacy and Trust, confirmed that Google would be killing off the cookie, as early as January 2022. He also clarified the tech giant’s plans for targeted advertising and a ‘privacy-first web’. The tech, media and advertising industries have all known this is coming – Google first announced that it would be stopping support for cookies on Chrome back in early 2020, and it is not the first browser to do so. However, the blog post has got everyone talking about Google’s search for alternative solutions to targeted advertising, as well as proposals from other players. So what does it mean? And where will it leave advertisers?

    Why is Google stopping support for cookies?

    Google, like the other tech giants, has come under increasing scrutiny and regulation around the world, with regulators and lawmakers looking very carefully at the company’s privacy and antitrust record. Indeed, two hires that the Biden administration recently made would appear to confirm that the US will continue to robustly enforce antitrust laws and other regulations. What’s more, there is a prevailing and increasing sentiment amongst internet users that they are worried about their privacy: in research conducted by Pew Research Center in 2019, 79% of American adults reported being somewhat or very concerned about the way their data is used by companies. It’s also as simple as a change in consumer habits: in the third quarter of 2020, mobile devices (excluding tablets) generated 50.81% of global website traffic – a share that has consistently hovered above the 50% mark since the start of 2017. Mobile browsers and apps don’t accommodate web-based cookie tracking as effectively as desktops, so there is a hole in advertisers’ ability to target their users.

    What is Google proposing as an alternative?

    Google’s statement earlier this month and the ensuing debate makes it clear that the industry is still only in the early stages of redefining how the online media market will work when the cookie becomes defunct. There is still a lot of uncertainty, and the industry is in a period of frantic experimentation, urgently seeking the best way to effectively target consumers with advertising.

    In his blog, Temkin promised that Google would not implement new ways to track individual users around the internet, and vowed that the company would only use privacy-preserving technology that relies on methods such as anonymisation and aggregation of data. Google’s Privacy Sandbox initiative, which is seeking ways to protect privacy whilst allowing content to remain freely available on the open web, has plans to start testing one proposal with a group of advertisers in Q2 of this year. This proposal would group internet users based on similar browsing behaviours; only cohort IDs, rather than individual user IDs, would be used to target them. This approach is based on the same principle as Facebook’s, which offers advertisers the opportunity to target ads to certain categories of users based on their data. Google will be keen that this proposal is workable and appeals to brands, as marketers are already diversifying their ad spend up and down the funnel.

    Other players are exploring targeting alternatives as well

    It’s not just Google with skin in this game: other collectives and ad tech players are also seeking ways to balance privacy with personalised, targeted advertising. A major collective formed last summer, called the Partnership for Responsible Addressable Media (PRAM), has brought together the IAB Tech Lab, the WFA, major advertisers like Ford, Unilever and IBM, media agencies, tech vendors and publishers. PRAM is proposing relacing cookie-based tracking with tracking tied to individual email addresses, whereby a user would log into a participating site with their email address or phone number, which would then be scrambled and used to keep tabs on them as they navigate other participating sites. Google has called this email-based approach impractical, and claims that it wouldn’t meet ‘rising consumer expectations for privacy’, or ‘stand up to rapidly evolving regulatory restrictions’ – and therefore wouldn’t be a sustainable investment in the long term.

    Even taking into consideration Google’s motives for casting doubt on whether cross-site individual tracking will meet consumers’ and legislators’ expectations and therefore the wisdom of investing in such a targeting methodology, the tech giant isn’t wrong in its conclusions. Many view this as a bold act by Google – they are soberly letting go of bad habits while others are just trying to cut back on the worst parts and hoping it will be enough. Perhaps Google’s statement was in fact the most helpful thing that they could do for the industry as it approaches this crossroads, pointing out that what they are trying to do won’t work, and they need to start over.

    Industry experts aren’t yet sold

    While some industry experts and commentators believe that Google’s Privacy Sandbox proposal would be an improvement on the current, cookie-supported situation, others are yet to be convinced. They claim that Google is just swapping one form of invasive tracking for another and could, for example, work out who a user is by cross-referencing their information with an email address from one of Google’s owned sites.

    They are equally sceptical about the email address approach, pointing out that it would be easy to ‘reverse-engineer’ a user’s identity by combining scrambled information with other information available in the public domain.

    What are the implications?

    The implications of Google’s announcement are still unclear, and the situation will continue to unfold over the coming months. It’s safe to say, however, that we will never see anything close to the breadth and width of tracking coverage that cookies have given marketers over the last 25 years. It is thought that the demise of the cookie will affect 85% of online advertising as we know it. New solutions will come from a wide range of different sources and approaches, so will be fragmented. What’s more, a large share of online traffic may not be identified at all; outside walled gardens, contextual targeting is likely to become the main tool. That isn’t necessarily a bad thing – it offers marketers the ability to deliver ads to consumers when they’re in a specific situation or frame of mind, which can only be a positive as consumer behaviour becomes more fragmented and unpredictable. It’s also an antidote to many of the issues around brand risk and safety.

    It’s worth bearing in mind that, just because the ways in which we manage reach, frequency and targeting are being fundamentally redesigned, it does not mean that people will radically alter their media consumption patterns, or that there won’t be any ways to target people online. Large sites with good user experience and consumer trust will retain their traffic and they will still be open for ads, even if impressions are anonymous. Ad impact on brand metrics and sales will remain, even when conversions can no longer be tracked. As Google said in their statement, ‘advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.’

    How should advertisers prepare and adapt for the post-cookie era?

    For now, advertisers need to understand which tools will be lost, which will remain uncertain and which will not change. They should also keep their ad tech flexible and rely on their media agencies for guidance and updates. This is probably not the best time to be investing in ad tech or in-housing.

    Looking ahead, even when data outside of Facebook and Google’s walled gardens is scarcer, advertisers should not resort to increasing their spend with these two platforms beyond what is proportional to media consumption patterns. They should also refrain from resorting to last-click attribution as view-through conversions tracking and MTA fail. Survey-based data and insights on brand metrics will undoubtedly surge.

    Many advertisers are, rightly, focusing on their valuable first-party data, exploring ways to leverage it in order to make better-informed advertising decisions. Many will seek to work with partners to establish a data-exchange from different sources, including with the walled gardens. Marketers will also be able to integrate their consumer research with their first-party data, giving a clearer picture of what consumers do, and why they do it. This will in turn allow them more effectively target audiences with the best messaging in the best context.

    The key takeaway? Hold tight – there’s no need to panic or do anything rash. Alternatives are being worked on and anyway, a world without the ability to track your consumers across the web might not be such a bad place.

    If you would like to discuss how you can prepare for the post-cookie era, please feel free to contact us:

    Header image: atk work / Shutterstock

  3. Advertising and media: key developments in 2021

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    2021 is finally here, its arrival gratefully welcomed by many across the world glad to turn their backs on a 2020 full of hardship and challenges.

    But we are still living with the coronavirus pandemic, and its impact has permanently transformed how brands and consumers interact. Stay-at-home orders for billions accelerated the digitization of our everyday lives, and brands have responded by ramping up the digital share of their marketing strategies.

    So, what developments will dominate in the year to come and what do they mean for advertisers?

    Point of sale will shift with consumption patterns

    2020 accelerated the digital revolution and forced brands to reconsider their priority advertising channels. Streaming and social advertising were obvious winners, while OOH and cinema have inevitably suffered because of their ‘out of home’ nature. But another less obvious victim is point of sale (POS). POS has always been an important channel for brands, convincing consumers as it does to make an impulse purchase or to make a last-minute decision in favour of one brand over another. The move online means that the power of this valuable opportunity to reach consumers at a critical time in the purchasing funnel has been diminished, and this is likely to have exacerbated the impact that the pandemic has had on sales. Many brands will be looking to shift their POS investment into alternative channels – and vendors such as Amazon will benefit, with their ability to reach consumers while they are in the ‘buying mood’, echoing the power of POS. In fact, all retailers with strong online sales capabilities will benefit, as retail – and therefore POS – increasingly moves online.

    Big Tech will face its big reckoning

    With so many people forced to stay at home, the services offered by the tech titans dominated another year: keeping in touch with Facebook, shopping with Amazon, collaborating with colleagues using Microsoft’s tools, and seeking entertainment via YouTube and streaming services. This inevitably sent their revenues soaring, with the big four each posting remarkable results whilst other companies floundered in the midst of a global recession. This dichotomy did not go unnoticed: it did nothing to quell suspicions that Big Tech is too powerful and that its monopoly on the marketplace is too large. They stand accused by lawmakers across the world that they have engaged in anti-competitive behaviour, using their power and scale to choke the ability of their smaller rivals to compete with them.

    2021 could be the year that Big Tech finally feels the ramifications of these accusations; regulatory authorities in the US, the EU, India and the UK are all clamping down on Big Tech in different ways. The EU has revealed the drafts of two digital services laws that would create a powerful apparatus to temper the power of Silicon Valley, complete with threats to break up companies that repeatedly engage in anti-competitive behaviour. Meanwhile, the federal government in the US has launched antitrust cases against Google and Facebook, accusing them of pursuing strategies to throttle competition.

    But it might not be these regulatory moves that pose the greatest threat to Big Tech. It could actually be its employees. The current employees of the Big Tech firms are becoming increasingly comfortable with expressing their concerns about their employers: in an internal poll, only 51% of Facebook employees said they believed the social network was having a positive impact on the world. The ‘badge post’ – a traditional farewell note for any departing Facebook employee – has been weaponised against the social network on a number of occasions in recent months, with one data scientist saying it was ‘embarrassing to work here’ thanks to the amount of hate speech on the platform. Meanwhile, more than 200 US Google employees have formed a union, the first group at a big tech company to do so as the industry faces a ‘reckoning over years of unchecked power’, and Google employees also recently protested over the departure of ethics researcher Timnit Gebru.

    For advertisers, this reckoning will likely lead to a wider dispersing of their digital ad dollars. Many are already asking their agencies to pull investment out of Facebook and direct it to other platforms such as TikTok, Snapchat and Pinterest, or even ad-supported streaming platforms, because they no longer trust Facebook enough to place 100% of their investment there. There is also a risk that consumers will react negatively to brands associating themselves too closely with the big tech companies – as we saw during the Facebook boycott in the summer of 2020. With trust in all the tech giants dissipating, it seems inevitable that this diversification trend will affect them as well – and that will be a good thing for the industry.

    TV will tip from linear to streaming

    Services such as Netflix, Amazon Prime and their newer competitors like Disney+ and Peacock have attracted new viewers in their millions in the past year – and ad dollars are following those eyeballs.

    At the US Upfronts, advertisers were increasingly demanding more streaming options as part of the packages they were purchasing, and vendors were obliging in an effort to offset losses incurred by the lack of live sport and investment from sectors hit hardest by the pandemic. Combined linear and streaming packages were common, and this focus on streaming by both vendors and buyers will likely tip the balance in streaming’s favour this year, particularly as restrictions seem set to be with us for the foreseeable future.

    US marketing executives say CTV already represents 18% of their advertising spend, with almost 39% of sports viewers watching live sports content through their CTV devices. This is significant because, up until recently, one of the key reasons to not cut the cord was due to live sports. As advertisers are increasingly including CTV into their mix, and cord-cutting is increasing, the need for measurement is amplified.

    Most people have probably heard about, or experienced, being inundated with the same ad over and over while watching a show on CTV. Not only is this frustrating, but it can also have the opposite to the desired effect: overserving ads can turn a potential customer off buying a product.

    For linear TV, it has been standard practice to measure certain quality KPIs to determine advertising effectiveness. We can tell where and when an ad runs – measuring the efficiency of daypart mix, competitive separation, double-spotting, to name a few – to ensure that the quality of the buy is delivering to set communication goals. Even with these measures in place, we too often see inefficient impression delivery, leaving valuable reach untapped.

    Within the CTV world, issues of measurement, management, and transparency are working to catch up. Even with frequency capping in place, it can be hard to implement, so a lot of waste is created. Some also speculate that, as usage of streaming increases, frequency will lessen due to more advertisers being present on the platform. While this may occur, it will still be important to have a bearing on where and when your ads run, and that frequency is being managed.

    With CTV’s share of media plans set to grow at an exponential rate in the coming years, more focus must be on measurement and reporting, to ensure that impressions are effectively building towards communication goals.

    Flexibility will be key

    2020 has shown that even the best-laid plans are not infallible. Which airline marketer, for example, put provisions in place for a pandemic that essentially shut down the travel industry?

    One of the many consequences was that the favoured model of large, long-term advertising commitments took a fatal blow, with a multitude of advertisers worst hit by the pandemic desperately trying to disentangle themselves from their advertising commitments. At the TV Upfronts in the US, flexibility was every advertiser’s number one priority, with cancellation options non-negotiable; as TV networks were desperate to bolster their bottom lines, buyers could negotiate options that suited them more, such as committing dollars by quarter, and the ability to cancel a certain percentage in a longer time frame. These must-haves are likely to remain in 2021 and beyond.

    The drive for flexibility to be able to better weather storms is likely to manifest in a gravitation towards media placements at the lower end of the sales funnel. These channels offer the flexibility to halt spending quickly, so advertisers are likely to choose programmatic spend rather than committing a fixed amount to a publisher, or social media channels as opposed to large, inflexible TV investments.

    Successful advertisers will be prepared, but agile

    The pandemic has accelerated change across the world, at a societal, economic and individual level, and we will be feeling its ramifications for many years to come. The most successful advertisers will be those who are prepared, but also agile: able to bend, rather than snap, in the face of inevitable change. In order to be prepared and flexible, a deep understanding of your media activity and how it can be optimized is essential.

    If you would like to discuss how to optimize your media performance in 2021 and beyond, please feel free to contact us:

    Header image: atk work / Shutterstock

  4. Are Big Tech’s Q2 results too good?

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    Across the world, national economies are in deep recession, businesses are folding and unemployment has soared. The coronavirus pandemic has wreaked havoc for so many, yet there is a subset of the global economy which demonstrates extraordinary resilience.  

    The tech giants release their Q2 2020 results

    On Thursday last week, amid much anticipation, the Big Tech big four released their second-quarter results. They would have been impressive in the pre-Covid world, but in the current context they were nothing short of astonishing. Facebook reported an 11% growth in revenue year on year, to $18.7 billion, and its profit doubled to $5.18 billion; its number of monthly active users (MAU) rose 12% to 2.7 billion. Amazon posted a record profit of $5.2billion, with sales rising 40% to $88.9 billion, while Apple’s profit rose 12% to $11.25 billion, and its revenue by 10% to $59.69 billion, thanks partly to a 1% increase in iPhone sales. Alphabet, Google’s parent company, reported a profit of $7 billion, which was down on the year, but still above the share price expected by Wall Street ($10.13 a share vs $8.21).  

    A great quarter for Facebook

    Despite the negative publicity that Facebook suffered following the #StopHateForProfit campaign and subsequent boycott of the platform by some of the world’s largest advertisers, the second quarter of 2020 was a great one for the social media giant, from a financial perspective. Revenue growth slowed, but it was still far greater than what analysts on Wall Street predicted. The financial success and growth in both monthly and daily active users signal that people and businesses used Facebook to stay in touch with loved ones and customers in the spring, when much of the world was in lockdown because of the pandemic. Facebook states that 180 million businesses use their tools, and it has 9 million active advertisers; this well-established longtail of smaller advertisers goes a long way to explaining why the July boycott wasn’t financially damaging to the platform, although it was very challenging from a PR perspective. Facebook is strengthening its relationship with its small business advertisers with the launch of two new initiatives, Facebook Shops and in-messenger commerce. 

    Strong performances from Apple, Amazon and Alphabet

    The other three components of the Big Four also enjoyed remarkable success in Q2. While Alphabet’s ad revenue was down, many analysts believe that this was largely because it came from a much larger base than Facebook’s, for example. YouTube’s ad revenue increased by 5.8% to $3.8 billion, which was much slower than its Q1 performance but still impressive given the context, namely many advertisers halting their ad spend. 

    Amazon, possibly unsurprisingly with so many people stuck at home, had a strong second quarterwith a record profit of $5.2 billion and growth of more than 40% in its division that is largely comprised of its ad sales business. The retail giant brought in revenue of more than $7 billion more than expected, despite initially being caught off guard by a sudden spike in demand during the pandemic, as more people chose to shop from the safety of their homes. It says it is currently expanding its fulfilment centres as it prepares for the peak holiday shopping season at the end of the year. 

    Despite store closures and operations disrupted by the pandemic, Apple’s revenue was the highest the company has ever reported in its second quarter, up 11% year on year. This rise is due largely to a 1% increase in iPhone sales, helped by the launch of the lower-cost iPhone SE. 

    Results that good don’t look good

    The tech giants and investors will undoubtedly be pleased with their performance in the second quarter, particularly given the economic context, but there is a fly in the ointment. Results this great, when so much of the world is in a downward spiral, are difficult to justify, and do nothing to quell suspicions that the Big Four are far too powerful, with too large a monopoly on the marketplace. Just the day before the Q2 results were released, the CEOs of Apple, Facebook, Alphabet and Amazon appeared before the US Congress’ antitrust hearing, as a culmination of 13 months of investigation by lawmakers into the market power of Big Tech. The key criticism against the four companies is that they have engaged in anti-competitive behaviour, using their power to choke the ability of their smaller rivals to compete with them. The investigation will produce a report after the hearing, which will be released towards the end of the year and will form the basis of new laws to regulate Silicon Valley 

    Each of the CEOs – Tim Cook, Mark Zuckerberg, Sundar Pichai and Jeff Bezos – tried to downplay the scale of their market leadership to Congress on July 29th. But their efforts were undermined by their huge earnings released just the next day, which not only underscore how reliant people became on Big Tech during the pandemic, but also symbolise how powerful these companies are and their ability to see off smaller competitors.  

    An awareness of perception issues

    Each company was acutely aware of the optics of their Q2 results. Amazon’s press release went out of its way to detail the ways in which it contributes to communities and its employees. Tim Cook said that Apple was conscious that its results contrasted sharply with the fortunes of so many others over the last few months, and that the company doesn’t have a zero-sum approach to prosperity, while Mark Zuckerberg highlighted his belief that Facebook’s products have changed the world for the better and improved people’s lives. Whether these statements will have any bearing on Congress’ conclusions remains to be seen. 

    Is Big Tech on notice?

    It’s very likely that the Big Four’s remarkable Q2 results will feed into Congress’ belief that they are too powerful; indeed, they – along with Microsoft – currently represent more than a fifth of the S&P 500, the first time since the 1980s that the five largest companies have had such a large share of the index. Congress lawmakers will inevitably seek to curtail that power to an extent, as it is in direct contrast with American antitrust laws. It will be fascinating to see what the implications for the Big Four, the tech sector and advertisers will be. 

    Image: Hand Robot / Shutterstock

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