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EMarketer: Google to outpace Facebook in U.S. online display ads

September 19, 2012|By Jessica Guynn
  • The Google Inc. company logo on an HTC Touch HD smartphone.
The Google Inc. company logo on an HTC Touch HD smartphone. (Chris Ratcliffe / Bloomberg )

Google Inc. will blow past Facebook Inc. in selling online display ads in the U.S. this year, predicts research firm EMarketer Inc.

That would mean that Google would achieve a trifecta. For the first time it would be the top seller of search ads, mobile ads and display ads.

Google is expected to generate display ad revenue of more than $2.3 billion this year, up more than 39% from nearly $1.7 billion in 2011. That’s more than 15% of the total U.S. market.

EMarketer also lowered its estimates for Facebook’s online display ad revenue in the U.S. this year. EMarketer had expected Facebook to generate about $2.6 billion this year, up from $1.7 billion last year. But a new report has lowered that figure to about $2 billion, or 14% of the U.S. market.

Google has used its dominance in search ads – and its purchase of ad exchange DoubleClick and mobile ad player AdMob -- to branch out into selling ads across the Web, on YouTube and on mobile. That strategy appears to be paying off. In January, Google Chief Executive Larry Page said Google display ads were on track to generate $5 billion a year in global revenue.

Both companies have benefited from the fading stars of onetime online display ad leaders Yahoo Inc. and AOL Inc.  Yahoo, which was topped last year by Facebook, will see its share of the U.S. online ad display market fall even more, EMarketer said. Yahoo will account for 9% of total display ad revenue this year, while Microsoft and AOL will each account for less than 5% of the total, according to the EMarketer report.

EMarketer estimates that the overall U.S. display ad market will grow 22% to nearly $15 billion this year, up from $12.3 billion last year. It attributes the growth to Google and Facebook continuing to expand their ad businesses, the surge in mobile usage and increased spending on digital video advertising, especially YouTube.

Together, Google and Facebook will have just shy of 30% of total display ad revenue by the end of 2012, EMarketer said. By 2014, EMarketer expects the two Internet giants to claim 37% of the market.

Google clearly thought ahead. EMarketer expects spending growth on display ads to outpace paid search ads this year. Facebook is also hinting that it plans to be more aggressive in selling ads across the Web.

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Follow me on Twitter @jguynn

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