Facebook Poised to Overtake Yahoo in Display Ad $

An interesting forecast in Monday's eMarketer (remember: be skeptical of forecasts, and pay more attention to the trend at work): FB is expected to double its Display advertising revenue this year.  When it does so, it will overtake Yahoo's #1 position.

There are three other bits of interesting "trend" data in the tables accompanying the article:

• Display ad revenue is expected to maintain its overall 20%+ yr/yr growth through 2012.
• Google's yr/yr growth is expected to dip this year (still a respectable 34%) then bounce back in 2012.  Not sure why this is ... could it be the Admeld acquisition?
• Share of the Big 5 display ad companies (FB, Yahoo!, Google, Msft and AOL) is expected to grow even further - from 38% in 2009 to 53% in 2012.  Someone out there's feeling the pinch!

What's this all mean?

Well, the numbers themselves are less impressive than the general trends they point to.

• Marketers are mildly bullish on overall marketing spend two years out, but particularly bullish on the shifting spend to online media.  It's only going to get larger.
• Given all the online ad choices, display ads are among the faster-growing (see the outlookin my June 10 blog).  My best as to why: there's a long history with display advertising (print, mind you) and an enormous amount of data to show what does and doesn't work.  It's a market that today's agencies (let's face it; most of them have their heritage in the "old" media) understand.  It's the safe bet.

There are three implications to all of this.

1. Just as network TV duked it out for audience size to set ad pricing, so too will the big online display advertisers.  There's an enormous amount at stake - for ad-selling companies, agencies and advertisers alike.
2. That said, pricing is going to become, shall we say, interesting - especially in the social media space.  Going are the mass demographic generalizations that come with Nielsen data, being replaced with the laser-like demographics that accompany online media.  Also on the ascendancy is the allure of targeting micro-markets in fulfillment of the one-to-one marketing world put forth by Rogers & Peppers in the 90s.
3. Lobbying on privacy and user data is highly likely to get even more intense.  The value of online advertising in any form is significantly enhanced by the ability to associate specific and often precise information about users.  With almost $500B spent on all forms of advertising there is simply too much at stake to risk having too tight a lid put on consumer data.