Search Still Leads Social
By all accounts we are well into the social media era: Facebook has 750 million-odd members around the world, including around 155 million in the U.S., equal to half the population, and established online players like Google want into social media, badly. It's noteworthy, then, that search still leads social by a big margin, at least in revenue terms.
According to the latest revenue report from the Interactive Advertising Bureau, total digital advertising spending jumped 23% to $14.9 billion in the first half of 2011. Both display (which includes the bulk of social media advertising) and search advertising grew by an impressive 27%, outpacing the Internet at large -- but search is still getting the lion's share of online advertising, increasing not only in dollar terms but in its proportion of the total as well.
Display grew from $4.34 billion in the first half of 2010 to $5.51 billion in the first half of 2011, while search increased from $5.75 billion to $7.3 billion. In proportional terms, display increased its share from 35.9% to 37% of overall spending, while search increased from 47.5% to 49% (according to the IAB they grew at the expense of email marketing and online classifieds). The IAB noted that search marketing more than doubled its rate of growth in the first half, up from 11.6% in 2009-2010, while display's growth rate increased from 16% in the previous year-over-year comparison.
In short, both types of online advertising are experiencing healthy growth and expanding their share of a growing market -- but search still leads by a significant margin across the board, including in terms of total dollars, percent share, and rate of increase in percent share.
The IAB report doesn't estimate how much of the first-half spending total actually comes from social media, but according to a May prediction from eMarketer, total U.S. social media advertising revenues will come to about $3.1 billion this year, up from $2 billion in 2010. Unsurprisingly, Facebook accounts for most of this, with revenues of $1.86 billion in 2010 and $1.6 billion in the first half of 2011 (however much of this comes from virtual goods sales, rather than advertising). For comparison, Google's revenues in the first half of 2011 came to $17.6 billion, up 29.4% over the same period in 2010.
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Erik, does this include mobile search?
Hey Jim, honestly I'm not sure. The only data I can cite on this subject comes from Macquarie Group in March of this year: they calculated that mobile search accounted for about 5% of all search spending at that time, and projected it could account for as much as 10% by year's end. On that basis Greg Sterling of Search Engine Land calculated that mobile search could be worth $1.1 billion in 2011 (with most of it going to Google).
While I'm at it, Gartner projects total (global) mobile advertising revenues will reach $3.3 billion this year, which is more than double their 2010 figure of $1.6 billion. Combining data from these two sources, it seems likely that most mobile advertising revenue comes from mobile search. Gartner also predicts total mobile ad revenues will reach $20.6 billion by 2015, with most still coming from search and maps, but more and more coming from video and/or audio ads.