Google Expected to Surpass Facebook in Display-Ad Sales
Google Inc. is expected to surpass rival Facebook Inc. in selling online “display” advertisements in the U.S. this year, according to a new estimate by research firm eMarketer Inc. — The result would mark a milestone for the Web-search giant …
Context & Ripple Effects
Google's display business has been building toward this since it confirmed plans to put display ads on Google.com back in 2008, extending the company past its search-text roots; by 2010 its income was rising 32% and topping forecasts on the strength of that diversification.
Now eMarketer projects Google will overtake Facebook in U.S. display-ad sales for 2012 — a symbolic flip, since Facebook had been cast as the display leader while Google was still seen as a search-only shop. The estimate traveled widely the same week, picked up by Forbes and The Next Web on top of eMarketer's own release.
First-order effects
- Media buyers reallocating display budgets face a new default: Google's network plus YouTube can now match Facebook's reach claim, weakening Facebook's pitch as the mandatory display buy.
- Facebook's growth narrative takes a hit at the worst moment — the company had just come public in May 2012 and needed display revenue momentum to justify its valuation.
Second-order effects
- Yahoo, AOL and Microsoft, the incumbent display sellers, get squeezed from both sides as Google and Facebook scale, pressuring them toward consolidation or pricing concessions to hold publisher inventory.
- Publishers selling through Google's exchange gain liquidity but cede more pricing power to the platform that now dominates both the buyer and seller sides of display.
Third-order effects
- If the pattern holds, U.S. display becomes a two-platform market with Google's data-and-exchange stack as the infrastructure layer — the same dynamic that later shows up in eMarketer's own projections of display spending overtaking search spending altogether.
- Third-party forecasters like eMarketer consolidate their role as the scorekeeper whose estimates effectively set market-share narratives, shaping advertiser behavior ahead of actual audited numbers.
The trend: U.S. display advertising is consolidating around a small set of data-rich platforms, with Google leveraging search-scale targeting to absorb the brand-display market Facebook pioneered.