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Facebook Takes 31.2% of the U.S. Ad Display Market

42 points by amnigos 15y ago

xnerdr 15y ago
I still say it's pretty much over for Google. http://nerdr.com/facebook-eats-googles-lunch-by-2012/ http://nerdr.com/facebook-eats-googles-lunch-by-2012/ They're being out played on their primary revenue stream and facebook isn't even breaking a sweat.
- simpleTruth 15y ago
  You missed an important part of that: "Facebook’s closest competitor is Yahoo’s network of sites, which claimed 10.1% of the market. Google, which is still relatively new to the display business, had 2.5%."
- bad_user 15y ago
  That link is one of the worst articles with shitty predictions I ever read. Big companies have a lot of resources available to get back on track -- Apple, Intel, Microsoft and even IBM are still around and kicking. Even if Facebook wins and Google loses, I'm just curious -- what's in it for you?
  - deleted 15y ago
    [deleted]
beagle3 15y ago
Prediction is hard. Especially when talking about the future. FB might dethrone Google, of course. But the 30% number does not imply that. Ads in google are pretty damn effective for everyone who is using them, whereas (from what I've heard of people in the industry), the only ones who are happy with FB ads are "lifestyle" advertisers who can't actually measure their impact. If you look at Real Time Bidding, there are ~100Billion impressions per day, of which 80% are worth $0.0000 or less, and then it starts rising with most commanding about 300-400 microdollars per impression, with a few publishers commanding 30000-40000 per impression. If FB owns all of the 80% and most of the 15% that are 400 microdollars, and google owns the 5% of 40000 microdollars, Google is not in danger (yet; they shouldn't rest on their laurels, of course). The info I have, skewed a little by the RTB industry (but which is increasingly becoming the online ad industry), is that for now the case is as described in the previous paragraph.
- orijing 15y ago
  Ads in google are pretty damn effective for everyone who is using them Possible, but don't forget Google has nearly a decade on Facebook in that arena. With that amount of time, most of those advertisers who found it to be ineffective would have stopped using the service, so it is a selection-bias issue. In comparison, Facebook's relatively new. With enough time, Facebook ads will become comparatively effective for everyone on them, as people learn how to use them better, as Facebook adds more ads features, and as those with the wrong business or advertising model pull back and try something new. Edit: What is it with Hacker News being so antagonistic when someone defends Facebook against an unjust assault? If Facebook were Google and Google were Facebook, I would have said the same thing: Time allows advertisers to adjust their advertising strategies and platforms such that, in equilibrium, you wouldn't be using the platform that is ineffective and hence those who still use a platform are probably finding it effective. This is not a matter of Facebook fanboyism, but one of selection in market equilibria. It's like asking a buyer of some particular brand of tofus whether they like the tofu. Well, they wouldn't buy it from that brand if they didn't, so hearing a majority of "yes" doesn't say so much.
  - il 15y ago
    The time frame doesn't matter too much, there is a fundamental difference between intent based advertising and interruption advertising. CPMs for social networks will always be lower because there are so many more pageviews per user, and the user isn't searching for anything or in a buying mood.
    - orijing 15y ago
      But effectiveness isn't about the number of clicks you get, but ultimately the value you derive from the impression (and the probability of a click). If advertisers get 30% less out of Facebook ads but it costs 30% less, then the effectiveness is comparable.
      - il 15y ago
        It's comparable for the advertiser, but it's not good for Facebook. Their inability to get higher CPMs for their traffic is a big problem for them.
hnsmurf 15y ago
I'd be more interested in seeing the breakdown by revenue. In my experience FB ad CPMs are way lower than Google's. Even if they had equal impressions Google would still be profiting something like 10x more probably.
listic 15y ago
What is that "display advertising impressions" that Google is new to?
- brandnewlow 15y ago
  Banner and rich media ads sold on a CPM basis rather than a CPC basis.
veyron 15y ago
Stupid Question [stupid because I should know this]: If facebook shows 4 advertisements on a page, is that counted as 4 impressions in the "impressions" metric? Has there been any effort to normalize the effect of showing ads [I don't think I've ever seen a google page or search with 3, let alone 4 ads]? Theoretically, a person could load a page with a ton of ads and artificially boost the impression measure ...
- idoh 15y ago
  Yes, each ad would show as getting an impression, even though there was one page view.
MenaMena123 15y ago
Seriously, Facebook users could careless about those ads, with Google your searching for an exact thing and those ads maybe helpful. When on Facebook no one is buying they are about friends. Its like an Ad in a hotmail email, the user is emailing someone not directly looking for anything, search is key. Facebook listen! ok? You need a Facebook Search, then you got that advertising game! :)
- deleted 15y ago
  [deleted]
- smackfu 15y ago
  It highlights a basic difference. Google is trying to provide ads for services that meet your current task. Facebook is trying to provide ads that appeal to you as a person, using all the information you provide in your profile.
  - MenaMena123 15y ago
    Either way, facebook ads aren't useful. If running a startup no one is running after Facebook ads like they ran after Google in the good days. Google made people money, not just ones with huge budgets. Facebook can bring awareness and that social experience, but do I have to have a huge budget for it to work? More than likely. Like I said no one is chasing Facebook ads.
  - enjo 15y ago
    Intent is all important in this stuff. I can justify spending $5 per CLICK on Google, because about 30% of the time that user really is looking for my service and interested in using it. Facebook lacks that intent, so their CPC is always going to be quite a bit lower. Unless they can monetize intent. Every day there have to be millions of "can someone recommend a <blank>" status updates. That'd be an ad I'd be interested in buying.
- mrspandex 15y ago
  I have to say, Facebook ads have been spookily relevant to my interests and I click them almost regularly. When I'm on Facebook, I'm just looking to waste time anyway, so an interesting ad might get a click. Google search ads are usually for sites I already knew about and visited.
jacques_chester 15y ago
Key question: are these new ads or ads taken from Google? Otherwise put: are Facebook taking a larger slice of Google's pie, or have they grown the pie overall?
programminggeek 15y ago
For all the talk about one beating the other search and display ads are completely different channels and Google has never been particularly strong in display ads. Google makes so much money by dominating the search advertising market that they pretty much dominated the entire time that they can try and get a foothold in other mediums like display, social, radio, tv, newspaper, and so on. The problem is that Google isn't nearly as good at those things because they don't have their own product to put it on. Without that they don't intimately understand the needs of buyers and they stop investing in those things before they are fully baked. Of course facebook is dominating display advertising because they put pictures next to their ads. Google doesn't do this for product quality reasons. That makes sense. In the end both are going to make gobs of money and dominate their respective markets.

42 points by amnigos 15y ago

I still say it's pretty much over for Google. http://nerdr.com/facebook-eats-googles-lunch-by-2012/ http://nerdr.com/facebook-eats-googles-lunch-by-2012/ They're being out played on their primary revenue stream and facebook isn't even breaking a sweat.

simpleTruth 15y ago
You missed an important part of that: "Facebook’s closest competitor is Yahoo’s network of sites, which claimed 10.1% of the market. Google, which is still relatively new to the display business, had 2.5%."
bad_user 15y ago
That link is one of the worst articles with shitty predictions I ever read. Big companies have a lot of resources available to get back on track -- Apple, Intel, Microsoft and even IBM are still around and kicking. Even if Facebook wins and Google loses, I'm just curious -- what's in it for you?
- deleted 15y ago
  [deleted]

beagle3 15y ago

Prediction is hard. Especially when talking about the future. FB might dethrone Google, of course. But the 30% number does not imply that. Ads in google are pretty damn effective for everyone who is using them, whereas (from what I've heard of people in the industry), the only ones who are happy with FB ads are "lifestyle" advertisers who can't actually measure their impact. If you look at Real Time Bidding, there are ~100Billion impressions per day, of which 80% are worth $0.0000 or less, and then it starts rising with most commanding about 300-400 microdollars per impression, with a few publishers commanding 30000-40000 per impression. If FB owns all of the 80% and most of the 15% that are 400 microdollars, and google owns the 5% of 40000 microdollars, Google is not in danger (yet; they shouldn't rest on their laurels, of course). The info I have, skewed a little by the RTB industry (but which is increasingly becoming the online ad industry), is that for now the case is as described in the previous paragraph.

orijing 15y ago
Ads in google are pretty damn effective for everyone who is using them Possible, but don't forget Google has nearly a decade on Facebook in that arena. With that amount of time, most of those advertisers who found it to be ineffective would have stopped using the service, so it is a selection-bias issue. In comparison, Facebook's relatively new. With enough time, Facebook ads will become comparatively effective for everyone on them, as people learn how to use them better, as Facebook adds more ads features, and as those with the wrong business or advertising model pull back and try something new. Edit: What is it with Hacker News being so antagonistic when someone defends Facebook against an unjust assault? If Facebook were Google and Google were Facebook, I would have said the same thing: Time allows advertisers to adjust their advertising strategies and platforms such that, in equilibrium, you wouldn't be using the platform that is ineffective and hence those who still use a platform are probably finding it effective. This is not a matter of Facebook fanboyism, but one of selection in market equilibria. It's like asking a buyer of some particular brand of tofus whether they like the tofu. Well, they wouldn't buy it from that brand if they didn't, so hearing a majority of "yes" doesn't say so much.
- il 15y ago
  The time frame doesn't matter too much, there is a fundamental difference between intent based advertising and interruption advertising. CPMs for social networks will always be lower because there are so many more pageviews per user, and the user isn't searching for anything or in a buying mood.
  - orijing 15y ago
    But effectiveness isn't about the number of clicks you get, but ultimately the value you derive from the impression (and the probability of a click). If advertisers get 30% less out of Facebook ads but it costs 30% less, then the effectiveness is comparable.
    - il 15y ago
      It's comparable for the advertiser, but it's not good for Facebook. Their inability to get higher CPMs for their traffic is a big problem for them.

hnsmurf 15y ago

I'd be more interested in seeing the breakdown by revenue. In my experience FB ad CPMs are way lower than Google's. Even if they had equal impressions Google would still be profiting something like 10x more probably.

listic 15y ago

What is that "display advertising impressions" that Google is new to?

brandnewlow 15y ago
Banner and rich media ads sold on a CPM basis rather than a CPC basis.

veyron 15y ago

Stupid Question [stupid because I should know this]: If facebook shows 4 advertisements on a page, is that counted as 4 impressions in the "impressions" metric? Has there been any effort to normalize the effect of showing ads [I don't think I've ever seen a google page or search with 3, let alone 4 ads]? Theoretically, a person could load a page with a ton of ads and artificially boost the impression measure ...

idoh 15y ago
Yes, each ad would show as getting an impression, even though there was one page view.

MenaMena123 15y ago

Seriously, Facebook users could careless about those ads, with Google your searching for an exact thing and those ads maybe helpful. When on Facebook no one is buying they are about friends. Its like an Ad in a hotmail email, the user is emailing someone not directly looking for anything, search is key. Facebook listen! ok? You need a Facebook Search, then you got that advertising game! :)

deleted 15y ago
[deleted]
smackfu 15y ago
It highlights a basic difference. Google is trying to provide ads for services that meet your current task. Facebook is trying to provide ads that appeal to you as a person, using all the information you provide in your profile.
- MenaMena123 15y ago
  Either way, facebook ads aren't useful. If running a startup no one is running after Facebook ads like they ran after Google in the good days. Google made people money, not just ones with huge budgets. Facebook can bring awareness and that social experience, but do I have to have a huge budget for it to work? More than likely. Like I said no one is chasing Facebook ads.
- enjo 15y ago
  Intent is all important in this stuff. I can justify spending $5 per CLICK on Google, because about 30% of the time that user really is looking for my service and interested in using it. Facebook lacks that intent, so their CPC is always going to be quite a bit lower. Unless they can monetize intent. Every day there have to be millions of "can someone recommend a <blank>" status updates. That'd be an ad I'd be interested in buying.
mrspandex 15y ago
I have to say, Facebook ads have been spookily relevant to my interests and I click them almost regularly. When I'm on Facebook, I'm just looking to waste time anyway, so an interesting ad might get a click. Google search ads are usually for sites I already knew about and visited.

jacques_chester 15y ago

Key question: are these new ads or ads taken from Google? Otherwise put: are Facebook taking a larger slice of Google's pie, or have they grown the pie overall?

programminggeek 15y ago

For all the talk about one beating the other search and display ads are completely different channels and Google has never been particularly strong in display ads. Google makes so much money by dominating the search advertising market that they pretty much dominated the entire time that they can try and get a foothold in other mediums like display, social, radio, tv, newspaper, and so on. The problem is that Google isn't nearly as good at those things because they don't have their own product to put it on. Without that they don't intimately understand the needs of buyers and they stop investing in those things before they are fully baked. Of course facebook is dominating display advertising because they put pictures next to their ads. Google doesn't do this for product quality reasons. That makes sense. In the end both are going to make gobs of money and dominate their respective markets.