Facebook might have reached for about 850 million users while preparing for IPO and Bing might slowly growing and grabbing a bit more of the search engine market share but in the end, eventually Google is still the undisputed king of the web and its royal status will only get stronger in the next few years.
That is according to a recent report of the research firm, eMarketer, that elaborates and predicts how the online ad industry would look like in the future to come (2011-2014) from the top five ad-selling companies perspective. Or as I like to call it: “Who has bigger?” (clue: Google)
U.S. Display Ad Revenue – Google Will Top Facebook In 2013
As for the current moment, Facebook is the display ad leader online (not only eMarketer thinks so) and it will continue to hold the display ad crown this year also with predicted $2.58 billion in revenue where Google the second will earn $2.54 billion.
But in 2013 the tables will turn and Google will take the lead with $3.68 billion in revenue, while Facebook will earn $3.29 billion. In 2014, the gap will grown even wider where Google predicted to earn $4.76 billion and Facebook $3.75 billion.
The other top display ad-selling companies will show gradual healthy (however slower) growth: Yahoo’s earnings will grow from $1.35 billion in 2011 to $1.64 billion by 2014, Microsoft’s from $560 million in 2011 to $960 million and AOL from $530 million to $810 million.
What Drives Google’s Display Ad Revenue Growth Faster Than Facebook’s?
Facebook revenue’s growth rates in 2011 (+51.7%) and 2012 (+48.8%) are a bit higher than Google’s (+41.9%, +48.5% respectively). However, Google’s growth rates in 2013 (+45.3%) and in 2014 (+29.7%) are much faster than Facebook’s (+27.6%, +13.7% respectively). Why is that?
I think that while all of Facebook’s display ad earnings comes from the growth of its social network exclusively, Google has a hold in more fast-growing areas: Video (YouTube), mobile (AdMob), ad network (DoubleClick) and also social networking (Google+).
Top 5 Online Display Ad Companies Will Grow Their Combined Share By 2014
By 2014, the display ad industry will be much more centralized around few companies only- The top display ad companies on the web (Facebook, Google, Yahoo, Microsoft and AOL) will grow their combined share from 47.4% in 2011 ($12.4 billion in total) to 54.4% in 2014 ($21.91 billion in total).
Diving deeper into the numbers, we can see that the race will get even more centralized around two companies only that will increase their share- Facebook (from 14% in 2011 to 17.1% in 2014) and Google (from 13.8% in 2011 to 21.7% in 2014).
While Microsoft will remain steady at 4.3%-4.5% share these years, Yahoo (10.8% in 2011 to 7.5% in 2014) and AOL (4.3% in 2011 to 3.7% in 2014) would lose big parts of their share.
Total Ad Market Share – No Competition For Google
When looking at the total ad revenue share chart of the top ad-selling companies it is pretty clear who really is the boss of the virtual world. Google holds 41% of the ad market and by 2014 it will grow its share even more to 47.4%.
Google’s online ad market domination is not only driven by a growth in display ad revenue but also from a big rise in search ad revenue (which also benefits Microsoft with Bing).
Yahoo, which was second in 2011 with 9.5% share, will drop to the fourth place by 2014 with 5.6%. Facebook will climb to the second place from 5.4% in 2011 to 7.1% in 2014 and Microsoft will go third from 5.7% in 2011 to 6.5% in 2014. AOL will keep declining from 2.8% share in 2011 to 2.1% in 2014.