The Impact of Corporate Consolidation in Big Tech

A Brief History of Corporate Consolidation in Tech

You’ve probably experienced the effects of corporate consolidation firsthand. Let’s break down its history in tech real quick:

A crash course in corporate consolidation

What is corporate consolidation exactly? It is when two or more companies combine to create a larger and more powerful entity.

There are two types of consolidations:

• Mergers – two roughly equal-sized companies combine and form a new entity.
• Acquisitions – one company obtains another.

Consolidation concentrates power into the hands of a few. The few then expand, grow and take over the majority revenue share of an industry.

The tech industry has a long, storied history of corporate consolidation.

Since the late 1970s, companies have repeatedly tried to monopolize the tech landscape. We all know the ones who were successful. Microsoft and Apple were there at the start of personal computing. They remain two of the most dominant companies in tech and the world.

The 2000s saw the rise of Google, Amazon, and Facebook (now Meta).

Some examples of corporate consolidation in tech

Here are some of the biggest tech acquisitions in the 2000s:

• Meta: Meta has acquired almost 100 companies. Its two largest acquisitions to date are Instagram ($1 billion) in 2012, and WhatsApp ($19 billion) in 2014.
• Google: Google has acquired more than 200 companies. Its most significant purchases have been YouTube ($1.65 billion) and Motorola ($12.5 billion).
• Microsoft: In 2016, Microsoft acquired LinkedIn for $26.2 billion. It’s the largest acquisition ever.
• AOL-Time Warner: The biggest one was $181.6 billion in 2000. We won’t talk about it. Yikes.

The Era of Big Tech

In the past decade, tech consolidation has accelerated to an insane degree. It can be overwhelming trying to wrap your head around it.

Remember, the landscape may change, but your content marketing essentials remain the same.

There are serious concerns about the “Tech Giants” dominating the space. Alphabet (Google), Apple, Amazon, Meta, and Microsoft are some of the most powerful corporations in existence. They rank as five of the world’s top ten largest public corporations and combine for a total market cap of over $7 trillion.

Additionally, they’ve been very active in making acquisitions.

Why tech companies acquire the competition

Tech acquisitions boil down to two things: competition and control.

Acquiring a competitor protects a tech company’s dominance in the market. It strengthens its position and increases its market share, allowing it to control more of the marketplace. Plus, there’s no easier way to take a potential competitor out of the game.

One of the most significant shifts in tech consolidation has been the amount of acquisitions.

In a recent Yale study, researchers tracked the percentage of tech startups that were being acquired. They found that the rate had risen from 10% to 90% in the last few decades. That is a seismic shift. That means consolidation is dictating the entire digital market.

Which leads us to the here and now.

Where are we now

Every facet of our day-to-day life has become dictated by technology.

It affects how we work, how we consume content, and how we communicate. So, it’s essential for you to become a master at content creation to separate yourself from the crowd.

The pandemic only increased our reliance on it.

While all the brick-and-mortar industries slowed down, big tech expanded. That expansion led to even more consolidation of power and influence. Plus, that power and influence surround the most valuable commodity in business: Data.

Knowledge is power. Make sure you have a firm handle on current marketing statistics and data. It gives you a competitive advantage in your content marketing and sets your team up for success.

Big Tech dominates the online advertising space because of how it harnesses that data.

Let’s lay it out:

• They take all the data they are getting from their users across all their platforms.
• They integrate it to create an algorithm for those users.
• That algorithm dictates what advertisements get delivered to them.
• Those advertisements keep their attention and lead them to buy.
• This leads to a higher conversion in sales and a better rate of return.

You can find where your audience is in the world, what platforms they are on, and market specifically to them. Pretty nice.

It’s worth mentioning that 2022 was a rough year for Big Tech.

Inflation and a looming recession have made all these companies scale back. There’s also been some actual pushback on them, with the FTC moving to block acquisitions by Meta and Microsoft this past year.

What Big Tech Consolidation Means for Marketers

Now, what does this all mean for you?

Well, as I’m sure you already know, digital ads account for almost 70% of global ad spend. That is…almost all of it.

It’s more important than ever to make sure you have a content distribution strategy in place you’re confident with. So, let’s start by talking about walled gardens.

What are walled gardens?

One of the most significant impacts of Big Tech consolidation is the rise of walled gardens.

A walled garden is a digital ecosystem where a company has significant control over the customer experience. They control the advertising activities and do not share their information. Think of Apple creating the lightning connector to replace the 3.5mm headphone jack. It’s the only company that uses it and the only company you can buy it from.

For example, a walled garden in the digital marketing space would be Meta.

If you want to reach any of their users, you must do so through their ad platform and follow their guidelines. It’s the same with Amazon. It’s a massive marketplace with a wealth of customer data that gets used for targeted advertising. But only Amazon has access to it.

What this means for you

As a marketer, there are both advantages and disadvantages to these walled gardens. Advantages:

• You have access to first party that is collected directly from users.
• You can use a platform’s algorithms and targeting capabilities for higher accuracy.
• You can use cross-device targeting.
• That targeting and accuracy can lead to a higher conversion rate and better return on investment.

Disadvantages:

• Less flexibility on where you can market your content.
• Big Tech sets the pricing.
• You have to follow big tech’s guidelines to market on their platforms.
• A lack of direct, one-on-one support.

Final Marketing Essentials to Keep in Mind

Content marketing can play a critical role in your SaaS and Tech success.

• Analyze your budget: Content marketing budgets are rising. Review your current marketing goals, set your budget, and make sure you’re getting the most out of it.
• Strategic content placement: Selection of the right marketing channels is vital. Research where your audience is and target the specific platforms they are on.
• SEO optimization: You want to make your content and its solutions as easy to find as possible. Implement your keywords. Perform regular SEO audits on your website and landing pages. Make adjustments as needed.
• Keep it flexible: Your content marketing strategy needs to be fluid. Don’t stagnate. Audiences change, and so should you. Make sure to do consistent check-ins on your planning and implementation.
• Consider outsourcing: We’ve entered a time when budgets are being cut, and marketers are asked to do more with less. Don’t be afraid to outsource your B2B SaaS content to proven experts who can maximize your budget’s impact and potential.

Where Do You Go From Here?

Big Tech isn’t going anywhere, and the digital space is only going to become more critical for marketing.

The future transition of power from Baby Boomers to Millenials and Gen Z is looming. For you, it’s essential to become as fluent as possible in the language of these digital ecosystems. That way, you can maximize the impact and reach of your brand.

The future is going to be full of amazing opportunities. You will need to be bold and innovative in your pursuit of marketing excellence. If that feels at all overwhelming to you, you’re not alone. ClearVoice can help you with your content marketing efforts.