Facebook becomes No. 3 ad-selling company in US
More than two-thirds of US online ad spending will go to just five companies in 2011, eMarketer estimates, up from 63% in 2009 and expected to increase further next year.
The consolidation of the ad market is uneven, though, with Google taking nearly 41% of all ad dollars and Yahoo! and AOL losing share. Facebook, boosted by display advertising, will get 7% of US online ad spending this year, pushing past Microsoft to become the third-largest ad-selling company in the country.
Google’s gains are being driven largely by search. Search revenues will be up 23.6% at the site this year, and Microsoft’s revenues will grow even more quickly. Search dollars at Yahoo! and AOL will continue their downward trend.
“Microsoft’s solid growth rates are due to the overall efficiency of the Bing search engine in delivering relevant results to searchers, as well as the company’s marketing of Bing to encourage more usage,” said David Hallerman, eMarketer principal analyst. “But Google’s lesser growth represents a more than $2 billion increase this year, compared to only an estimated $322 million increase for Microsoft.”
This growth will mean Google takes more than three in every four search ad dollars spent in the US this year—a proportion that will rise further next year. Microsoft’s gains put it at only 8% of the market. Overall, the four largest search engines account for nearly 94% of the $14.38 billion search ad market.
“Search has become a duopoly dominated by Google, with Microsoft’s Bing and Bing-powered engines (Yahoo!) in a strong but distant second position,” said Hallerman. “The network effect keeps Google on top—the more users a search engine has, the more advertisers it attracts, which in turn can attract more users, and so on. But Microsoft is gaining both search query and market share.”
“Further, Microsoft’s deal with Yahoo! has not yet helped the latter company,” Hallerman added. “Google has benefited from the delayed fruition of the search alliance, steadily gaining market share as the alliance’s combined share has remained relatively flat.”
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