Google Steals Yahoo!’s Display Revenue Crown
ADOTAS – And as their display prophets foresaw, it came to be that Google ruled all online advertising. While it’s not surprising to hear Google dominated search revenue (a 59.6% share in 1Q11, a tad bit above 59.1% in 4Q10), the latest stats from market researcher IDC also show that Google passed Yahoo! in display revenue during the first quarter of 2011.
It’s actually the first time in Internet history that Yahoo! has been knocked out of the top spot — surely not an event they’re celebrating in Y-town.
The Google Display Network benefitted from both increased display spend and a nice bump in revenue — its percentage of display revenue share increased from 13.3% in 4Q10 to 14.7% in 1Q11. Yahoo!’s share, on the other hand, declined from 13.6% to 12.3% over the same time period.
IDC’s Karsten Weide analyzes:
“We expect further pressure on traditional display ad publishers such as Yahoo!, Microsoft and AOL. GDN for now does not threaten them directly since their primary client base are brand advertisers, while the GDN for now mostly attracts SMBs. But that may change, and when that happens, the old stalwarts’ lumbering sales organizations will have to compete with GDN’s ultra-effective automated sales interface.”
While Facebook already serves far more display impressions than either Google or Yahoo, its ad revenue is so low because the impressions are so cheap. Eventually, with improved targeting and smarter products, CPMs and CPCs will go up and the social network could come dominate the space in terms of revenue. Facebook’s primary advertisers are those same local SMBs that boosted GDN’s revenue.
In general, worldwide spend increased by 14.3% year over year — from $15.9 billion in 1Q10 to $18.2 billion in 1Q11. In the U.S. alone, the pop was 14.2% — from $7.1 billion in 1Q10 to $8.1 billion in 1Q11. IDC estimates quarter-over-quarter increases of 13.3% to reach $8.3 billion in 2Q11, and a 13.8% bump for full-year 2011, reaching $34.6 billion versus $30.4 billion in 2010.
Also interesting, revenue from display advertising is growing at a faster rate than search — display revenue accounted for 33.3% of online revenue compared with 29% two years ago (remember the dark times?). Search’s share of online ad revenue declined to 48.7% versus 53.4% two years ago.
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