Google Gaining On Yahoo In Display

dispaly adsDon't look back, Yahoo -- Google and Facebook are gaining in display. In its forthcoming report on Internet advertising in the first quarter, market research firm IDC says that Google's rise in display advertising has been so swift that the company now poses a serious threat to the biggest players in the segment -- Yahoo and Microsoft.

"Thanks to rapidly growing display ad sales on YouTube, Google has managed to steadily grow its net display ad revenue market share (excluding traffic acquisition costs) from not even 1% in 1Q 07 to 7% in 1Q 10, and more growth is in the cards," commented IDC analyst Karsten Wiede on the report's findings.

Fueled by its acquisition of DoubleClick in 2007, Google has now overtaken the No. 3 company in the category, AOL -- which had 6% share in the first quarter, and may later this year push Microsoft, with a 9.5%, share, out of the No. 2 slot if current trends continue.

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That would leave only Yahoo, the longtime leader in display for Google to conquer. IDC says Yahoo share was 16.5% in the first quarter, but has been stuck at about 16% for the last five quarters. "Longer term, four to five years out, even Yahoo...can't feel safe anymore," wrote Wiede.

Facebook is coming on strong too, although not quite as fast as Google. The world's largest social network has already surpassed News Corp. and CBS, the former No. 4- and 5-ranked companies in display, is poised to catch up to AOL within the next three to four quarters, according to IDC.

Online display advertising overall held up better than expected last year, increasing 4% to $8 billion -- buoyed by a 39% gain in video spending to $1 billion, according to the 2009 ad report from the Interactive Advertising Bureau and PricewaterhouseCoopers.

Yahoo in the first quarter reported a 20% year-over-year gain in display ad revenue as marketers continued to ramp up spending on high-profile brand campaigns. U.S. online ad spending overall increased 11% from $6.3 billion a year ago to $7 billion, according to IDC. The firm is predicting 19% growth for online advertising to $31.5 billion in 2010 from $26.4 billion in 2009.

Google's U.S. net market share across all advertising formats increased by 1.3 percentage points compared to the prior quarter, to 32.2%. Yahoo's share decreased by 0.6 percentage points to 10.3%, and Microsoft's was essentially unchanged at 6.4%.

1 comment about "Google Gaining On Yahoo In Display ".
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  1. Eric Bouris from Yahoo!, May 26, 2010 at 10:31 a.m.

    Yahoo just bought Associated Content. Thats another 16 million+ unique users. Thats a tough order for Google to catch. I wonder if Mark Walsh took this into consideration.

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