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    Facebook Leads Yahoo, Microsoft in Display Ad Market with 176B Impressions

    Written by

    Clint Boulton
    Published May 14, 2010
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      Facebook, which has been racking up search queries to double digit gains, is also reaping more display ad impressions than Yahoo or Microsoft.

      comScore released stats May 13 showing the social network led all online publishers in the United States with 176 billion display ad impressions for the first quarter of 2010, good for a 16.2 percent market share.

      Yahoo, for years the reigning leader of display ads, came in second with 132 billion impressions, or 12.1 percent of the market. Microsoft is No. 3 with 60 billion impressions, or a 5.5 percent share.

      Facebook’s display ad leadership comes with a caveat: comScore does not include ads served by Yahoo and Microsoft on their network partners.

      To what may we attribute Facebook’s rise to power in display ads?

      The social network sports more than 400 million users, many of whom spend a half hour or more per day in the network, uploading links, photos and videos, chatting with friends and playing Farmville or other games. More time spent on Facebook’s Web pages means more exposure to display ads.

      Jefferies and Co. analyst Youssef Squali said the growth was also partly driven by newly designed site from Facebook that allows the company to insert more ads per page, and partly by moving all ad inventory in-house instead of outsourcing it to Microsoft.

      Of course, advertisers aren’t spending as much advertising on Facebook as they are on Yahoo or Microsoft because CPMs (cost per thousand impressions) are much lower compared to CPMs on those big players, according to Squali. Still, that could change as the allure and value of social advertising grows.

      Social Ads Are on the Rise

      “We see this trend as a reflection of the growing comfort and appetite from brand advertisers who are willing to experiment with social inventory,” Squali said in a May 13 research note. “With improving targeting and conversion, this inventory could overtime eat materially into the expected growth of premium display revenues.”

      Moreover, he said Facebook will continue taking share from portals as users spend more time on the social network. Over time, advertisers will move from banner ads that are sold at a remnant price to more interactive ads that are sold at premium prices on Facebook, MySpace and other social sites.

      Fox Interactive Media and AOL rounded out the top 4 and 5 display ad spots, with 4.9 percent and 2.9 percent market shares, respectively. Google, the undisputed leader in keyword-based search advertising has struggle to find momentum in display ads, took 2.4 percent share for the sixth spot on the list.

      Some analysts want to put Google’s video ads from YouTube into the mix, and Google would undoubtedly rate higher than it does. However, comScore said it measures display ads as static and rich media ads and excludes video ads, house ads and “very small ads.”

      More generally, comScore said U.S. Internet users saw 1.1 trillion display ads during the first quarter, a 15 percent increase from a year ago and a record. Advertisers spent $2.7 billion for Q1 in the U.S., with the average CPM coming in at $2.48.

      All of this is to say, the economy is recovering after the recession crippled the industry in 2008 and deep into 2009. “This pickup in activity should bode well for the online advertising industry as we move forward in 2010,” said Jeff Hackett, comScore senior vice president.

      Who was doing all of the advertising?

      Telco carriers took 3 of the top 5 display ad positions, no doubt touting new smartphones and various data plans. AT&T led the way with 26.3 million impressions, followed by Verizon with 21.8 million views. Sprint captured the No. 5 spot with 10.1 million impressions served.

      Clint Boulton
      Clint Boulton

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