Wednesday, May 29, 2019

Ad Revenue

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[[File:YouTube monetization.png|thumb|YouTube monetization (logo) - One of the most prominent sources of Ad Revenue online]]

Ad Revenue is a term that is used to describe the monetary income that individuals and businesses can earn from displaying paid advertisements on their website or surrounding their internet-based content. In September 2018, the [[United States|U.S]] internet advertising market was estimated to be worth $111 billion with market share held mostly between the major technological enterprises of Google, Facebook, Amazon and Microsoft.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> These major enterprises make money themselves through online advertising but also have initiated pathways for individual users and influencers to earn an income. Some of the common pathways used by individuals and businesses to earn Ad Revenue include Google AdSense, YouTube monetisation or Facebook Ad Breaks.<ref>Liquid error: wrong number of arguments (1 for 2)</ref>
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== Overview ==
There are a variety of methods and providers which individuals and online organisations can utilise in order to earn monetary income in the form of advertisements accompanying their website or digital media content. Digital technology giants such as [[Google]], [[Facebook]], [[YouTube]], [[Amazon (company)|Amazon]] and [[Microsoft]] allow website owners and content creators to display advertisements within and surrounding their online media and also share in the income that is generated from the parties which pay to advertise on any given site.<ref name=":0"></ref> Individuals and organisations can earn a significant sum from Ad Revenue as paid to them by the major media sites. In 2018 it was reported that major YouTuber stars such as [[Jake Paul]] and [[PewDiePie|Pew Die Pie]] each earned more than $10 million through monetising their online video content.<ref>Liquid error: wrong number of arguments (2 for 1)</ref> Revenue earned by individuals and organisations from online advertisement sources is considered taxable in multiple countries. In 2015, the [[Australian Taxation Office]] confirmed questions regarding the tax status of online Ad Revenue stating that it was taxable and content creators should consider themselves to as a ‘performing artist’.<ref name=":1" /> Also, in the United States the [[Internal Revenue Service|Interval Revenue Service]] deems online Ad Revenue to be taxable. For those earning income from technology platforms controlled by Alphabet Inc. which includes [[Google]] and [[YouTube]], a 1099 taxation form will be issued by the company if an individual or group earns more than $600 per year.<ref name=":0" /> The Ad Revenue industry is not without controversy. Ad Blocking technology has proven to be an issue for technology giants and individuals looking to earn money through displaying advertisements alongside their content. [[Ad blocking|Ad Blocking]] software is reportedly used by 17% of people aged 18-34 and allows users to block advertisements from appearing on their screens whilst visiting a given website, thus removing the possibility that a user will click on a given advertisement and earn Ad Revenue for the other parties. <ref name=":2" />
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== Notable Platforms ==

=== Google ===
[[File:Google adsense logo.png|thumb|Google Adsense logo]]
[[Google]] is one of the largest online advertising platforms in the world, and as of March 2019 is estimated to facilitate more than 90% of global searches.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Since October 2015, [[Google]] and it’s online advertising arms have existed under the structure of an American multinational holding company known as Alphabet Inc. [[Google]] cofounder Larry Page has stated that this move was made in order to allow Google and other Alphabet Inc. subsidiaries to operate more independently and efficiently.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> The company’s digital advertising revenue figures were approximated at around $39.92 billion U.S. in 2018 and between itself and other online giant [[Facebook]], is reported to control just under 60% of the U.S<ref>Liquid error: wrong number of arguments (1 for 2)</ref> online marketing space. A significant area of Google’s online advertising platform comes from their [[Google AdSense]] program which allows website owners to display Google driven advertisements on their site. As customers click on the embedded advertisements in a given website [[Google]] makes money from the advertising company, passing on 68% of that money to the person who owns the participating website, keeping 32% itself.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> As of January 2018, online advertising accounted for 84% of [[Alphabet Inc.|Alphabet Inc]]’s revenue. The advertising system they have created provides significant revenue for themselves but also for individual’s and smaller companies who are actively participating as partners in Google’s network.

=== YouTube ===
[[File:Resizeyoutube.jpg|thumb|YouTube logo]]
Another online advertising giant which falls under [[Alphabet Inc.|Alphabet Inc]]’s control is video sharing website [[YouTube]]. [[Google]] bought [[YouTube]] for $1.65 billion in 2006<ref>Liquid error: wrong number of arguments (1 for 2)</ref> and as of 2015 [[Bloomberg L.P.|Bloomberg]] estimated it to be worth approximately $70 billion with an average daily visitor amount of over 30 million.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> [[YouTube]] allows content creators to share as well as monetise their own videos on the site and in certain cases will pay them a percentage of the advertising revenue received by the company for adverts which are placed within and around videos. The approximate share of advertising revenue paid to those making the monetised videos is reported to be 55% and in 2013 the average earnings of individual [[YouTube]] content creators was estimated to be $7.60 per thousand views.<ref name=":0" />

=== Facebook ===
[[File:Facebook logo 2014 wiki blue.gif|thumb|Facebook logo]]
[[Facebook]] is also one of the largest online advertising platforms and as of March 2018 was estimated to hold a combined market share with [[Google]] of just under 60%.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> In the last quarter of 2018, Facebook stated that its online advertising revenue was $16.9 Billion U.S. Facebook allows businesses to advertise throughout its website, utilising its intimate knowledge of user demographics and interests to ensure that a given advertisement has a significant chance of reaching their specific target audience. As [[Facebook]] users click on the advertisements visible on their profile or timeline, [[Facebook]] charges the advertising company a fee, “cost per click”. [[Facebook]] also allows businesses to increase the visibility of their posts beyond those who follow or like them and charges a certain amount for given intervals of people the post reaches.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> In terms of how Facebook allows for businesses and individual users to make money themselves through advertising initiatives, ‘Facebook Ad Breaks’ allows users to earn revenue from advertisements that play during their own video content on the site. The video’s must be at least three minutes long, with the advert not showing until at least the end of the first minute.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Early testing of this platform by some users has indicated that not all viewers are watching the videos long enough to become monetised viewers and thus the potential revenue has been judged as low.<ref>Liquid error: wrong number of arguments (1 for 2)</ref>

In 2012, [[Facebook]] purchased the image-sharing application known as [[Instagram]]. At the time of purchase [[Instagram]] had more than 30 million downloads and cost Facebook $1 billion to buy.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> As of 2019, Instagram has over 1 billion monthly active users and is estimated to be worth more than $100 billion.<ref name=":3">Liquid error: wrong number of arguments (1 for 2)</ref> Within the application, Instagram allows individuals and businesses to advertise image and video content in front of potential customers within their target demographic.<ref name=":5">Liquid error: wrong number of arguments (1 for 2)</ref> As well as targeting the appropriate demographic through its knowledge of those using the application, Instagram allows advertisers to direct potential customers through to outside websites, download content and to shop within online stores.<ref name=":5" /> Customers pay several dollars for every thousand users which see their advertisements and it is predicted that [[Instagram]] will earn more than $10 billion from this service annually as it moves through to the end of 2019.<ref name=":3" /> This revenue figure makes [[Instagram]] responsible for approximately 17% of its parent company, Facebook’s total online advertising income.

=== Amazon ===
[[File:Amazon logo.svg|thumb|Amazon logo]]
As of 2018, [[Amazon (company)|Amazon]] was reported to be the 3<sup>rd</sup> largest online advertising platform and saw predicted advertising revenues sit at above $4 billion U.S.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> With a reported 197 million unique online visitors per month to their site, [[Amazon (company)|Amazon]] certainly has a large customer reach ability similar to the larger advertisers of Google and Facebook.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Amazon does currently allow it’s users to pay to have their products made more visible on target customer’s screens and also allows for sellers to act as affiliates, being paid a commission of up to 15% for each time they refer someone who completes a purchase on the site for a certain product.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> As of May 2019, [[Amazon (company)|Amazon]] is attempting to expand its affiliate advertising program by initiating partnerships with other large online media agencies and heavily trafficked websites. Amazon has reportedly reached out to online media giants [[BuzzFeed|Buzzfeed]] and [[The New York Times]] with an offer that would see them being paid in order to recommend or advertise particular products on their site.<ref name=":4">Liquid error: wrong number of arguments (1 for 2)</ref> Such advertisements would include a link to the [[Amazon (company)|Amazon]] page where a potential customer could buy the product and in return the media agencies would receive a percentage commission of the total amount of goods purchased.<ref name=":4" />

=== Bing-Microsoft ===
[[File:Bing logo (2016).svg|thumb|Bing logo]]
In 2018, the U.S. online advertising market was reported to be worth $111.14 Billion of which [[Microsoft]] have approximately 4%.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> [[Microsoft]], which owns search Engine [[Bing (search engine)|Bing]] and social media site [[LinkedIn]], earns advertising revenue through programs such as Bing Ads.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> [[Bing (search engine)|Bing]] as a search engine is estimated to facilitate just above 6% of internet searches.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Businesses and individuals can pay to have their advertisements displayed to customers on each platform. Bing’s web publishers program allows website owners themselves to share in advertising revenue by displaying [[Bing (search engine)|Bing]] driven advertisements on their sites in front of visitors.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> [[Microsoft]] itself also earns Ad Revenue through the operations of its sites. [[Microsoft]] subsidiary, [[LinkedIn|Linkedin]] allows individuals and businesses to pay in order to have image and video-based advertisements displayed to demographics they wish to target.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Each time a [[LinkedIn|Linkedin]] user clicks on one of these advertisements, the company is paid between $2-5.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> [[LinkedIn|Linkedin]] has more than 500 million users and in 2018 it was announced that they expected to earn approximately $2 billion dollars annually from the suite of advertising activities operating on the platform.<ref>Liquid error: wrong number of arguments (1 for 2)</ref>

== Issues ==

=== Tax Implications ===
Revenue earned by individuals and organisations as a result of participating in online advertising initiatives such as [[Google AdSense]] and YouTube Monetisation may face different income tax requirements based on location. In 2015 in Australia, the [[Australian Taxation Office]] outlined that anybody earning income from online advertising would be classed as a performing artist and be required to pay income tax.<ref name=":1">Liquid error: wrong number of arguments (1 for 2)</ref> Under the Australian Taxation Office guidelines, a performing artist also includes other professions such as singers, dancers, or a similar person who is utilising their own intellectual or entertainment related skills.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> Specifically related to online advertising income, the [[Australian Taxation Office]] said that any income that an individual receives from online advertising is a reward for providing services based on their activities as a special professional and therefore can form part of the taxpayer’s assessable income.<ref name=":1" /> In the United States, the [[Internal Revenue Service]] also deems online advertising income to be taxable for individuals.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> For example, those in the United States earning Ad Revenue from technology platforms controlled by [[Alphabet Inc.|Alphabet Inc]]. will be issued a 1099 taxation form directly by the company if the income is more than $600 per year.<ref name=":0" />

=== Ad Blocking ===
[[File:Adblock logo &amp; wordmark.png|thumb|Adblock logo &amp; wordmark]]
[[Ad blocking|Ad Blocking]] refers to the use of various computer applications or programs to remove all online advertisements from appearing on your web browser.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> This technology has led to controversy as it means that content creators and website owners are unable to earn revenue from those customers who use Ad Blocking software. One [[The Wall Street Journal|Wall Street Journal]] survey found that 17% of users aged 18-34 used [[ad blocking]] technology and thus prevent any “[[pay-per-click]]” advertising, as used by the major platforms, to be utilised fully.<ref name=":2">Liquid error: wrong number of arguments (1 for 2)</ref> Evidently, the growth of [[Ad blocking|Ad Blocking]] technology could stunt the growth of online advertising revenues since if customers and web users cannot see the advertisement, they cannot interact with it and no earnings can be made from it. However, there has been some support for ad blocking software from major technology companies such as [[Google]]. In 2018, [[Google]] announced that it would be launching ad blocking type software within its [[Google Chrome|Chrome]] application aimed at targeting websites or advertisements that are designed to disrupt customer experience and do not allow for customers to dismiss them before a certain time has elapsed.<ref>Liquid error: wrong number of arguments (1 for 2)</ref> It is reported that after [[Google]] notified potentially impacted websites of the changes, approximately 42% made pre-emptive changes to ensure that they were not found non-compliant with the new advertising user guidelines. Under the current protocol, any site that is in breach of Google’s user guidelines will be contacted and given 30 days to resolve the advertising issues before further action is taken. [[Google]] has announced that their [[ad blocking]] technology will be available to customers who use their search engine without the need for downloading third party applications or installing any external software.<ref>Liquid error: wrong number of arguments (1 for 2)</ref>


== References ==
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from Wikipedia - New pages [en] http://bit.ly/2I6kfbp
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