Display advertising: Facebook first, but Google gaining

Facebook was the top dog in the display advertising for 2011, but its lead may not last for very long. Next year, Google is expected to take first place, according to a new forecast.
Written by Emil Protalinski, Contributor

In 2011, Facebook saw net display advertising revenues of $1.73 billion in the U.S. Google meanwhile reached revenue of $1.71 billion last year. Both companies managed to pass Yahoo, the previous king in the market. While Facebook is first and Google is second now, eMarketer predicts Menlo Park has only one more year left in the lead: 2012. This year, U.S. display revenue growth at both companies will be nearly identical (around 48 percent year over year). Facebook is expected to earn $2.58 billion in revenue, compared to Google at $2.54 billion, eMarketer estimates. Next year though, the search giant will surpass the social networking giant, as you can see in the left chart above.

Rounding out the top five last year are Yahoo with $1.35 billion in revenue, Microsoft with $560 million in revenue, and AOL with $530 million in revenue. This means that the top five don't even control half the market (47.4 percent), since their percentages break down as follows: Facebook (14.0 percent), Google (13.8 percent), Yahoo (10.8 percent), Microsoft (4.5 percent), and AOL (4.3 percent). As you can see in the right chart above, the big five will very soon control more than half of the market.

These numbers are just estimates though; it's worth noting how very different they are compared to what comScore reported late last month. That firm said Facebook managed to widen its lead in the U.S. display advertising market last year, increasing its market share from 21 percent in 2010 to 27.9 percent in 2011.

Facebook's main source of revenue is its online advertising business, so its market share performance is closely watched for growth. While many agree it is doing very well in display advertising, the company is still just a small player in the overall online advertising market. Two months ago, we learned Facebook had just 3.1 percent market share of global advertising expenditure in 2010, though that slice did double from 2009.

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