One of the great ironies of the Internet is that anyone can create a website and reach millions of people, and yet, at the same time, a tiny handful of companies are increasingly dominating our online lives.
By Guy Cookson, Partner at Hotfoot Design
Evidence of the winner takes all effect are everywhere.
According to Forbes, $4 out of every $10 spent online in the US is now with Amazon, and an estimated 64 per cent of all American households has an Amazon Prime membership. Google has more than 80 per cent of the search engine market in countries as diverse as Brazil, Germany, India, UK and US, and processes an incredible 3.5bn search queries a day. Meanwhile, more than 2bn people globally have an active Facebook account – more people than were even alive in 1900.
And when newcomers do enter the market and threaten to take people’s attention away, Facebook either buys them (like Instagram and WhatsApp) or shamelessly copies their best features.
Facebook and Google, as a duopoly, have captured one fifth of all online advertising spend in the world, earning a combined $106.3bn last year, and are responsible for almost all of the growth in this sector. What makes this so difficult to counter is that the scale of these businesses is the very thing that makes them popular. Facebook functions so well as a social network because most of your friends are there.
Google serves the best search results because the more people that use it, the smarter it gets. Amazon can deliver your parcel the very next day because it is worth their while to invest in the infrastructure to make that possible. One of the most interesting challenges today for small businesses is how to best use the tools created by these corporate giants to their advantage.
As an agency we spend an increasing amount of our time helping our clients acquire and engage customers through Google and Facebook. We use Amazon Web Services to host data.
These companies are inescapable and yet not unassailable, because even when the winner takes all, the game can still change.
Just ask Kodak.