Facebook Threatens Google by Capturing 31% of Display Ads
Facebook served 346 billion display ads in the first quarter, grabbing nearly one-third market share to lead Yahoo, Microsoft, AOL and Google.Facebook racked up 346 billion display ad impressions for the first quarter this year, blowing away the field with 31.2 percent of the 1.1 trillion display ads served in the United States, comScore said May 5.
For perspective, Facebook almost doubled the display ad clicks from the year-ago period, when it notched 16.2 percent share, and it took three times the share No. 2 player Yahoo garnered for the quarter.
That includes all ads running on Google's YouTube property, as well as non-text ads on the Google display network and DoubleClick platform. For the record, ComScore excludes video ads, counting static and rich media ads as display ads. Still, Google's robust display ad run-rate calls into question how much Facebook is making from its lion's share of display ads. This figure is difficult to calculate, as Facebook is still private and is not required to disclose it financials.
EMarketer took a crack at the task in January, estimating Facebook tallied $1.86 billion in ad sales in 2010 and projecting the social network to earn $4 billion in 2011. By comparison, Google earned about $29 billion in total online ads last year. Still, Facebook's display ad growth is growing exponentially, which should be a big concern for Google, which paid almost $5 billion total for DoubleClick and YouTube together because it understood the importance of complementing its search ads with display ads. Google used to chase Yahoo in display, but now everyone is chasing Facebook, which has clearly cracked the code in this burgeoning sector. Still, the future looks bright for Facebook and its rival display ad providers, for whom even a slice could translate to billions of dollars in revenue. Jeff Hackett, comScore executive vice president, said that in addition to counting more than one trillion display ads per quarter, nearly 300 individual advertisers spend at least $1 million a quarter on display. It seems as though display ads are quickly becoming for Facebook what search ads became for Google over the last decade: a cash cow.
Moreover, Facebook's renewed efforts to extend its tendrils outside the walled garden with its social plug-ins, including the Like button (installed on 2.5 million Websites) and new Send button, portend greater things. Search Engine Land's Danny Sullivan believes these tools are helping Facebook become the "one true login" that OpenID failed to provide for users to keep them from entering passwords for multiple Websites.