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Stephen Logan

Facebook Leads the Way in Growing US Display Ad Market

14th May 2010 Social Media, Facebook, News, Industry News, Paid Search 2 minutes to read

The first quarter US advertising figures from comScore show that 16.2% of all display ad impressions are now made on Facebook, making the social networking site a clear leader in a growing market.

Advertising is big business online. comScore figures show that during the first quarter alone in the US that display ad spending reached $2.7 billion. The 1.09 trillion impressions received during this period represents a 15% increase when compared with 2009.

Along with an increase in impressions, the balance of power has also shifted considerably. Last year Facebook was a rising star in the display ad world. Their 7.5% share gave them a third place ranking behind Yahoo and Fox Interactive (which presumably includes MySpace). Now though, it’s all change.

Facebook have more than doubled their share to secure a 16.2% stake in the market. Yahoo have slipped to second, with a 12.1% share (down from 13%) and Microsoft up to third with 5.5% [Study: Facebook led US in display ad impressions in Q1].
Google, somewhat surprisingly, still languish down in sixth with a meagre 2.4% slice of the display ad pie. This puts them directly behind AOL; another one of those who have experienced a major slip, going from 6.3% down to just 2.9%.

Display ads, unlike Pay per Click advertising, appear on the pages of websites and blogs. Facebook benefits from being the second most visited site in the world, with display ads featuring on almost every page throughout the site.

Google of course doesn’t have display ads on its homepage and relies firmly on PPC for income on search pages. They instead offer AdSense, which are hosted ads used by websites to earn an income. Yahoo recently surrendered their AdSense equivalent, Yahoo Publisher Network, which of course could have an adverse reaction on future display ad figures [see: Yahoo Continue Cull with Yahoo Publishing Network Closure].

Display ads cover a far broader spectrum than their PPC equivalent. Paid search is largely restricted to ad text and a title, with a few exceptions. However, with a display ad you have the opportunity to host banners, videos and more dynamic advertisements.

They offer an ideal opportunity to expand your online advertising efforts and promote your brand on some new formats. Being embedded within a site they are also less reliant on search, although targeting is a little more difficult.

These figures show that Facebook have been highly effective in transferring their popularity into long-term revenue streams. Their position at the top of the display ad table in the US gives hope for further expansion and highlights the site’s marketing power for advertisers.

It also clearly demonstrates why they chose to bring advertising in-house, prematurely ending their previous agreement with Microsoft adCenter back in February [see: Facebook drop Microsoft adCenter, Integrates Bing Search]. With a 16 per cent stake in a $2.7 billion industry (per quarter), the future looks rosy for Facebook.

Meanwhile Google and Yahoo will have to up their efforts if they are going to slow Facebook’s display ad rampage. Whilst Google need to diversify and perhaps not tread on so many toes, Yahoo just need traffic.

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