How Google's Billion-Dollar Display Biz Supports Search


The number of display ad impressions will decline 25% per person in the coming years. Fewer ads won't necessarily mean less effective campaigns because consumers will have more control in the type of ads they view. That's the future of display advertising, said Google's Vice President of Display Advertising Neal Mohan during a recent IAB Innovation Days keynote address.

Mohan also noted that 35% of campaigns will use metrics beyond clicks and conversions, 25 billion ads per day will tell people why they see them, and more than 40% of online Americans will name display ads as their favorite ad format. Let's not forget about HTML 5 and the ability to reach outside the box.

Google's U.S. display advertising revenue will surpass $1 billion in 2011, as the company's display market share revenue reaches 9.3% -- up from 8.6% in 2010, eMarketer estimates. Today, Yahoo leads with 14.4% market share in U.S. online display ad revenue, but by next year Google and Yahoo will take 12.3% and 12.5%, respectively, according to the research firm.



Similar to a stock portfolio that continues to grow under less than optimal economic conditions, companies that have transitioned into icons continue to diversify offerings, as well keep one step ahead of trends. eMarketer estimates that net U.S. paid-search advertising revenue at Google will grow 38.9% to $10.92 billion in 2011, helping to push the company's overall U.S. search revenue share to 75.9% this year, up from a 73.6% in 2010 and a 69.8% share in 2009.

In a research note published Monday, eMarketer Senior Analyst David Hallerman explains Google's challenges as Facebook's revenue from display ads is projected to reach $2.87 billion in 2012 -- up from $2.19 billion in 2011, according to eMarketer.

Hallerman estimates that Google's U.S. online display ad revenue will reach $1.82 billion in 2012, up from $1.15 billion this year. Yahoo will come in at $1.85 billion, up from $1.62 billion, respectively.

Google's display revenue gains will come from large advertisers that are already Google customers; small or medium-sized businesses that have relied on search for years, but want to expand reach; and large-brand marketers looking to YouTube to expand on possibilities through video advertising.

Take Lionsgate and DreamWorks as examples. An interview with Sylvester Stallone for the Lionsgate movie "Expendables" taps the entire page, integrating content outside of the traditional YouTube box. Stallone says "share" and pounds his fist to make the frame beneath the box crumble, revealing the share buttons for Twitter, Facebook and others. DreamWorks marketing efforts included something similar for "Kung Fu Panda 2," where Jack Black steps in to encourage YouTube visitors to "drag something over to Poe."


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