The ad tech industry is facing a major threat from big-name advertising companies, according to a new study.
The report released by the ad tech trade group AdtechWorld found that “cheap online advertising” is “losing out to more established brands.”
“The new generation of online advertisers is more likely to pay for online advertising in the hope of earning a better deal from the brands that make their campaigns available,” Adtechworld stated.
“They are also increasingly willing to pay higher prices to secure better results.”
The study found that the average price paid for online ad space in the US last year was $2,898.
That’s a 27 percent decrease from 2015.
The average price of a $3.50 online ad, which Adtech World defines as a $4.00 purchase, is $3,904.
The study found online advertising “loses out” to larger brands such as Microsoft, IBM, Dell, Intel, Cisco, Google, Amazon, Facebook, Adobe, and others.
The ad tech company said that the “big four” companies that are making a “significant” share of online ad sales are Microsoft, Adobe and Intel.
“It’s no secret that the tech giants are trying to gain an edge in the online ad marketplace, and that they are paying more to secure their turf,” AdTechworld wrote.
“The study shows that the major online ad players are losing out to big-ticket brands.”
In addition to Microsoft, Adtech also found that Amazon, Google and Facebook have a combined share of around 90 percent of online advertising.
In 2015, Amazon had a market share of less than 20 percent of the total online ad market, according the report.
Adtechworld noted that the online advertising industry is “facing a significant threat” from big companies, and noted that “digital advertising is more competitive now than it has ever been.”
The report added that the industry is on track to lose $2.8 trillion to online ad spending by 2020, and Adtech said that this could mean “a sharp drop in ad revenue for the adtech industry.”
AdtechWorld also pointed out that online advertising revenues have been growing steadily, but are now “stagnating” because of “the onslaught of big-budget, digital marketing campaigns.”
The company noted that digital ad spending “is now at a level not seen since 2009,” and that the trend has continued in recent years.
“In 2020, online ad spend will be $2 trillion, or nearly 15 percent of total US ad spending,” the report stated.
AdTechworld also noted that online advertisers “are increasingly willing” to pay high prices to ensure better results.
The ad company noted a recent study that found that a $5 purchase was “the equivalent of paying $200 to see a single commercial.”
AdTechWorld added that “adtech giants have been losing market share to the big players for years.”
Ad Techworld said that “online advertising is growing and the big-screen advertising platforms have been able to capitalize on this growth.
This has driven prices for ad space at the large companies down to the $2 billion mark, and online ad platforms have lost market share at an accelerating rate.”
Ad tech companies including Amazon, Adobe Systems, Intel and Cisco are all on the cusp of taking over the online world, AdTechWorld said.