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Insight behind Google & Meta's ad revenue 🤯
The scale is just one of the factors.
Google India made ₹24,926 Cr ad revenue last year 💰
Meta made ₹16,189 Cr in the same year 💸
The monetisation lesson startups need to learn ⬇️
Quick context 🗓
Advertising revenue is still the major revenue source for both giants in India even after they have launched hundreds hardware & software products. And, it's no co-incidence.
So, what can startups learn about the advertising model?
1/ Scale 📈
Advertising thrives on scale. When you have atleast a million session per day, you enter the scale club. Google & Meta own majority penetration across search & display advertising. Compare that scale to one of the largest Indian ad player being InMobi around ₹400 Cr. That's super low scale.
2/ Perceived value 💰
Most advertisers cry about "Google & Facebook Tax" & spend heavily on these platforms. Apart from distribution, high level of trust on return on advertising spends & scaling predictability builds the right perceived value.
3/ Recurring distribution 📈
Both companies have expanded the category itself. Especially with Google Play store & gaming being top advertising based category. The user growth & user retention guarantees them predictable budget deployment. This is a criteria/ ask from most large scale FMCG advertisers who have year long budget plans.
4/ Diversity of advertisers 🧭
From the local restaurant advertising on Google maps to Coca Cola advertising on Instagram stories, they own the enterprise & long tail of advertisers. It fool proofs them against seasonality.
5/ Solid tech infra 💵
First, the way advertising campaigns are deployed. Second, help them measure everything from impression to conversion. Third, allowing them to use API based tools on top of their existing dashboards / ad managers. A lot of system 2 design to be honest.
6/ Skin in the game 💳
Free ad credits to first time advertisers to getting them dedicated account manager when they show signs of growing ad spends. Plus, as soon as you enter the "crore club", you get an army of top management working with you on a weekly basis. They understand how to make large deals happen.
7/ Breadth & depth of ad products 🎯
You want to solve for search discovery, Google search ads play the game. You want a guaranteed deal on Times of India, you get a direct deal through Google 360. You need to partner with an influencer on IG, Meta creator partner model comes into picture. Most small scale advertisers fail to understand this nuance.
That was the Google & Meta advertising model story ✨
Admonetisation is tricky. Monetisation is even trickier. We cover the science of solving for revenue at the GrowthX experience. Checkout the complete experience to learn the craft of growing revenues.
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