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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 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. 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.

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 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. 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 Pew Die Pie each earned more than $10 million through monetising their online video content. 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’. Also, in the United States the 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. 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 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.

Google
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. 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. 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 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. As of January 2018, online advertising accounted for 84% of 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
Another online advertising giant which falls under Alphabet Inc’s control is video sharing website YouTube. Google bought YouTube for $1.65 billion in 2006 and as of 2015 Bloomberg estimated it to be worth approximately $70 billion with an average daily visitor amount of over 30 million. 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.

Facebook
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%. 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. 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. 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.

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. As of 2019, Instagram has over 1 billion monthly active users and is estimated to be worth more than $100 billion. Within the application, Instagram allows individuals and businesses to advertise image and video content in front of potential customers within their target demographic. 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. 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. This revenue figure makes Instagram responsible for approximately 17% of its parent company, Facebook’s total online advertising income.

Amazon
As of 2018, Amazon was reported to be the 3rd largest online advertising platform and saw predicted advertising revenues sit at above $4 billion U.S. With a reported 197 million unique online visitors per month to their site, Amazon certainly has a large customer reach ability similar to the larger advertisers of Google and Facebook. 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. As of May 2019, 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 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. Such advertisements would include a link to the 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.

Microsoft Bing
In 2018, the U.S. online advertising market was reported to be worth $111.14 Billion of which Microsoft have approximately 4%. Microsoft, which owns search Engine Bing and social media site LinkedIn, earns advertising revenue through programs such as Bing Ads. Bing as a search engine is estimated to facilitate just above 6% of internet searches. 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 driven advertisements on their sites in front of visitors. Microsoft itself also earns Ad Revenue through the operations of its sites. Microsoft subsidiary, Linkedin allows individuals and businesses to pay in order to have image and video-based advertisements displayed to demographics they wish to target. Each time a Linkedin user clicks on one of these advertisements, the company is paid between $2-5. 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.

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. 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. 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. In the United States, the Internal Revenue Service also deems online advertising income to be taxable for individuals. For example, those in the United States earning ad revenue from technology platforms controlled by Alphabet Inc. will be issued a 1099 taxation form directly by the company if the income is more than $600 per year.

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. 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 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. Evidently, the growth of 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 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. 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.