Facebook’s ad revenues come from one source—display ads—but Google’s strategy to diversify ad formats and move into display will create a turf war, predicts eMarketer. And it appears that Facebook will lose its edge. As Forbes contributor Robert Hof characterized it, while it appeared that Facebook was “set to run away with the rest of the online advertising business that Google hasn’t already stolen…Facebook may not be the one leading the race for long.”
eMarketer research firm estimates that Facebook narrowly topped Google in 2011 in display ad revenues, with 14% of total U.S. total versus Google’s 13.8%. The numbers will remain level through 2012, but eMarketer expects Google’s share of the display ad market to leap ahead to nearly 20%; with Facebook’s rising more slowly.
Two losers in the game: Yahoo! and AOL, both of which have been losing share, while Microsoft will simply endure with numbers hovering around 4.4%.
Also true, the US display ad market will see increasing consolidation: By 2014, 54.4% of all online display dollars in the country will go to one of the top five sites, up from 47.4% in 2011.
Facebook and Google had the highest display ad revenues during the period studied, and the highest growth rates. Facebook gained nearly 52% in display ad revenues in 2011, for $1.73 billion; Google grew by 41.9% in 2011. But by 2013 and 2014, as Facebook’s growth levels off, Google’s will continue to rise.
So, by 2014, U.S. display revenues at Google will reach $4.76 billion, compared with $3.75 billion at Facebook and just $1.64 billion at Yahoo! If these forecasts hold true, then of a total $21.91 billion in U.S. display ad revenues, almost $12 billion will go to the top five sites in 2014.
Repeat: if those forecasts hold truel. eMarketer’s prediction came as quite a surprise, given Facebook’s meteoric rise in ad revenues, and as Hof described, “Facebook has only begun to tap into the opportunities of socially infused advertising and marketing.” But he takes this as a sign that marketers are unconvinced that Facebook has “cracked the code on display advertising, the original ad format that has seen a decline relative to search advertising–until recently.”