Google, Facebook Continue to Lead in Digital Display Earnings - eMarketer

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Google, Facebook Continue to Lead in Digital Display Earnings

Twitter revenues set to surpass AOL in 2014, Microsoft in 2015

March 29, 2013

US digital display ad spending will continue its double-digit growth trajectory this year, eMarketer predicts, with advertisers expected to shell out $17.70 billion on various display ad formats served to desktop and laptop computers as well as mobile phones, tablets and other devices.

The leader of the pack is Google, with $2.26 billion in net US digital display ad revenues in 2012 and $3.11 billion expected in 2013. Facebook, which lost the top spot last year, will rake in $2.75 billion in 2013, eMarketer estimates, up from $2.18 billion last year.

Net US Digital Display Ad Revenues at Major Ad-Selling Companies, 2011-2015 (billions)

Based on analysis of multiple sources, eMarketer does not see significant top-line shifts among major players since the previous forecast, though display revenue mixes are shifting toward video and mobile formats, and programmatic buying. eMarketer has revised its estimates for the top display ad-selling companies only slightly, largely based on Q4 earnings reports.

The 18.1% growth expected this year for US display advertising is down somewhat from more robust rates of increase in 2011 and 2012, but eMarketer continues to be bullish on the prospects for digital display advertising—especially at social media properties like Facebook and Twitter, as well as at Google, which has dramatically increased its overall share of the display market in recent years.

Increased display ad spending will also help Yahoo!’s revenues, the bulk of which come from search, though the company will underperform compared with the overall display ad market throughout the forecast period.

Net US Digital Display Ad Revenue Growth at Major Ad-Selling Companies, 2011-2015 (% change)

Yahoo! will earn an estimated $1.37 billion in net US display ad revenues this year, up 1% from 2012, according to eMarketer. But total US display advertising spending grew 21.5% to $14.98 billion in 2012, and is projected to grow a further 18.1% to $17.7 billion in 2013, eMarketer estimates.

eMarketer expects Yahoo!’s share of net US display ad revenues to decline again this year to 7.7%, down from 9% in 2012 and 11% in 2011. In 2008, Yahoo! accounted for 18.4% of all US display ad revenues. By comparison, Google and Facebook will see their shares of display ad revenue grow to 17.6% and 15.5%, respectively, this year.

Net US Digital Display Ad Revenue Share at Major Digital Ad-Selling Companies, 2011-2015 (% of total digital display ad revenues)

A major reason for Google’s increase in display revenues is YouTube. Google’s video property has reach far beyond that of any other online video platform, and serves more ads per viewer. Even though the site needs more professional, brand-friendly content to realize its full advertising potential, its size and scope are already so massive as to bring in significant dollars. And potential improvements in advertiser-friendliness leave room for Google to grow to become an even more important player in the display ad market.

Facebook, meanwhile, has benefited from the shift to mobile as well as fast uptake of native ad formats such as ads in the newsfeed. eMarketer has raised expectations for Facebook’s overall share of the market based on these factors as well as the potential strength of Facebook Exchange (FBX).

On the other end of the spectrum, AOL and Microsoft continue to grow more slowly than the display market as a whole and will keep losing share. Within the next two years, eMarketer expects Twitter to outpace both companies in its share of net US display ad revenues.

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