Can the Media Industry Right-Size the Advertising Ecosystem?

Each show contains this signature exchange between the two:

Pinky: "What are we going to do today, Brain?"

Brain: "Same thing we do every day, Pinky. Try to take over the world."

I can imagine that similar conversations take place at Amazon's headquarters.

"What are we going to do today, Mr. Bezos?"

"Same thing we do every day. Try to take over the world."

In Amazon's case, the latest takeover conquest may be the advertising industry. According to a recent edition of the Benedict Evans Newsletter, Amazon sold close to $40 billion of advertising last year -- bigger than Prime, bigger than the entire global newspaper industry, and probably more profitable than AWS.

And while there is some dispute about whether ads on Amazon are really advertising, rent, or something else, you can't deny the incredible influx of revenue to the tech retailing giant and the impact it has had on "traditional" advertising outlets. The fact is that eight of the top ten global media owners by ad revenue are tech companies, with Amazon in fifth place behind Alphabet (Google), Meta (Facebook), Bytedance (TikTok) and Alibaba.

Evans then asks the following compelling questions: "So, what are the ads doing for Amazon? Some people think they're degrading the experience – certainly, it's hard to shop without wading through them. But you could also ask whether this is ‘advertising' or ‘marketing' – indeed, you could ask the same about Google's search ads. Is paying for placement an ad, or trade dollars, or end caps, or a slotting fee? Does that distinction break down? Does it matter?"

From my perspective, the bigger story is the transition away from "media advertising" to "retail advertising." Are high-traffic websites or popular social media apps going to permanently alter how we -- producers and consumers -- understand advertising? Does it scare you that Walmart had $2.7 billion of ad revenue last year while the New York Times had $523 million?

We are in the midst of a period of enormous upheaval in the media and entertainment industry. The "truths" about the industry we once considered irrevocable are being dismissed. What once was fantasy is now fact. And companies that can't or won't adapt will face the same fate as Blockbuster and Sears.

In the words of another of my sons' favorite fictional characters: "There's been a great disturbance in the force." But it's during times of uncertainty where longstanding walls can come down and new bridges can be built. This is the time where inspired and creative financial leaders can help guide their companies' bridge-building campaigns.

MFM wants to support that effort by providing you with educational programs on a broad cross-section of business, financial, technology and leadership topics taught by thought-provoking pioneers in these fields. The MFM Annual Conference features an array of these educational offerings and the opportunity to network with hundreds of your colleagues from every sector of the industry. The Annual Conference takes place May 22-24 in Los Angeles. Register before April 17 and receive a significant discount. I look forward to seeing you there -- and working with you to create the future of the media and entertainment industry.

Click the social buttons above or below to share this content with your friends and colleagues.

The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.