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Facebook and Google Going Big on Online Display Ads

Wednesday, February 15, 2012

Author: Michelle McGinnis

Feel like you saw more web banners and online ads this past year? You’re not imagining things.

ComScore released its U.S. Digital Future in Focus for 2012 on Friday and it showed big brands are pushing online display ads hard. In the last quarter of 2011, 145 advertisers delivered more than 1 billion display ad each, a 38% increase over the year before. And more of them are appearing on your Facebook account.

Some usual suspects appear at the top of most ads for the year: AT&T (about 105.8 million), Experian (about 67.6 million) and Verizon (about 49.5 million). But Google broke through for the first time this year, delivering nearly 40.5 million online ad

The reason for this sudden rise, comScore explains, is the battery of products Google is marketing, which include Google Chrome, Google Offers and Google+. A quick look at Google’s most recent annual report shows the company recorded a $700 million increase in advertising and promotion this past year.

But the growth in online display advertising isn’t just due to Google’s deep pockets. It’s clear that advertisers like Facebook more than ever.

Facebook now accounts for 1 out of every 4 online display ads, accounting for over 1.3 trillion ad impressions in 2011, according to the comScore report. The social networking company far outpaces its nearest competitor Yahoo!.

One reason advertisers might be hitting up Facebook – as if its user base of 850 million wasn’t reason enough – is its stickiness. It accounted for nearly 15% of all time spent online in December.

Facebook-engagementGoogle might be spending more on online display ads, but it clearly plans to collect more. In January, Google CEO, Larry Page, said the company eventually expects to sell $5 billion in display advertising per year. In September, a Google VP said he thinks the online display advertising market will become a $200 billion industry.

With Yahoo! in a publicly weaker position, Google clearly wants to dig into Facebook’s ever larger slice of the pie.

From the point of view of a consumer, you can expect the barrage of online display ads to continue. From a business standpoint, it means standing out amid all that noise will become tougher.

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