• by Mark Walsh  @markfwal, November 21, 2011

In its first analysis of display advertising on the Amazon.com home page, Macquarie Group reported that CPG marketers such as Philips and Procter & Gamble accounted for the biggest share of ads during the second half of the fourth quarter, at 28%. Other top ad verticals for Amazon included media (23%) and financial services (10%). Another big chunk (28%) was dedicated to house ads for Amazon Local’s daily deals service.

Macquarie analyst Ben Schachter added Amazon to his twice-quarterly reports on home page advertising among the top Web portals, since the firm believes the online retail giant plans to ramp up its display ad business. That effort would extend to third-party sites, as well as its own properties. 

Yahoo and AOL continued to show signs of weakening demand, based on home page ad trends, while YouTube remained strong and MSN had steady gains from both the third quarter and the year-earlier period. Given the uncertainty surrounding Yahoo as it searches for a new CEO and fields offers from potential bidders, its results are coming under even more scrutiny than usual. 

After getting a lift in the third quarter from promotions for fall TV premieres, higher-priced ads on the Yahoo home page declined during October and the first half of November. Oversized or custom ad units accounted for only 23% of ads, compared to 39% in the second half of Q3, and 32% a year earlier. 

And ad sales on the Yahoo login page -- where the company began selling ad space last year -- sold out on 65% of the days so far in the fourth quarter, down from 74% for the mid-August to September 30 period. Purely brand-focused advertising fell to 40% from 45% a year ago.

AOL’s home page also reflected softening ad demand. It once again had the lowest proportion of oversized/custom units (19%) and brand-focused ads (30%) across the four major Web portals. The report also pointed out that AOL is getting little benefit from its Project Devil premium ad offerings; none appeared on the home page in the first half of Q4. 

On YouTube, Macquarie found that ad quality remained high in the fourth quarter to date, with the site’s signature masthead unit selling out almost every day. Media companies more than ever constitute the driving force behind YouTube’s advertising, accounting for 65% of total home page ads. That’s up from 50% three months ago on a seasonal spike in video game advertising.

For its part, MSN quietly continues to pick up steam. It had a higher proportion of oversized/custom ads (28%) than Yahoo or AOL during the study period. And the share of both oversized and brand-focused ads on MSN saw big increases from a year ago.

Looking more closely at Amazon, the report pointed out that 43% of its home page ads were direct response-based and 45% had a combination of branding and direct-response elements. Only 13% were purely brand-focused. “A different mix of advertising relative to the other major portals we track is not surprising, given Amazon’s intent to drive sales volumes directly through its website,” stated the study.

In that vein, it noted that several ads even featured a “click to add to Amazon shopping cart” button directly within the ad, and nearly all linked directly to an Amazon page for purchase.

Macquarie said 41% of the home page ads across the four Web portals (excluding Amazon) were oversized/custom ad units, up from 36% in the first half of Q3 and just below the 44% posted in the year-earlier period. The increase reflects a seasonal uptick from holiday-related advertising. Among ad verticals, media was by far the largest -- accounting for 30% of ads, followed by auto, 15%, and financial services, 11%.