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Facebook to surge by Yahoo as No. 1 in display ads

Research firm eMarketer says Facebook will grow display advertising 80.9 percent and take a 17.7 percent share of the market.

Facebook is on the verge of becoming the largest display advertiser in the United States, displacing Yahoo.

The social-networking site, which held off on running ads in its early days in order to avoid alienating its users, will grow its net U.S. display revenues by 80.9 percent this year to $2.19 billion, according to a new study by Internet research firm eMarketer. That will give the social-networking giant a 17.7 percent share of the display ad market this year, blowing past Yahoo, which will hold a 13.1 percent share.


"Facebook's supreme popularity--both in terms of numbers of people and amount of time they spend there--creates a plethora of display ad impressions, mainly for its unique form of banners," said David Hallerman, eMarketer principal analyst. "And that popularity is also boosting what advertisers will pay for its display ads."

Facebook is rapidly distancing itself from its major display ad rivals, according to the study. The second fastest growing ad-seller among the top five is Google, which should grow at a 34.4 percent clip this year, eMarketer says. Microsoft, Yahoo, and AOL will all grow at less than 20 percent, all below the overall growth of the market, which the firm estimates will be 24.5 percent.

In 2012, eMarketer believes that Google will make up some of the lost ground. The firm says that Google's display ad revenue will climb 58.3 percent, while Facebook will grow a more modest 31.3 percent. eMarketer, though, cautions that the Facebook estimate for 2012 "is likely on the conservative side" and may be adjusted upward when the firm revises its social network ad revenue estimates in August.


Even with that slower growth, Facebook will extend its overall share of the display ad market in 2012 to 19.4 percent. Yahoo will slide to a 12.5 percent share while Google will account for 12.3 percent of total revenue, up from 9.3 percent this year, according to the study.

Facebook's leadership in display advertising comes just a year after the company took over managing the sale of the graphical ads on its site from Microsoft. The software giant took on the task when it invested $240 million in Facebook in 2007 and became the exclusive third-party advertising platform partner for Facebook.