Facebook sees
a huge jump in advertising
Now accounts for 27.9 percent of all online display ads
By Bill Cromwell
Jan 31, 2012
Just hours away from Facebook's expected initial public offering, there's yet more evidence of just how dominant the social network is.
And it could become even moreso.
A report out from comScore, the online measurement company, found that Facebook accounted for 27.9 percent of all U.S. display ads on the internet last year.
That's more than double the share of the No. 2 player, Yahoo, which had an 11 percent share. And it served up more than five times No. 3 and No. 4 Microsoft and Google, which were both just under 5 percent.
Facebook's share grew from 21 percent in 2010. By comparison, Yahoo's share grew only 0.1 percent over that same span.
And
Facebook's share will grow again this year, forecasters predict, underlining the growing importance of social media to advertisers who once shied away from the unpredictable medium.
That growth will be explosive over the next few years.
A recent report from BIA/Kelsey, a local media research company, predicts that U.S. social media ad spending will go from $2.1 billion in 2010 to $8.3 billion in 2015, a compound annual growth rate of 31.6 percent.
Much of that will come in the display category, where 34 percent of digital impressions are currently generated by social media sites.
And nearly all of that will be from Facebook.
Though Twitter and, to a lesser degree, LinkedIn are rising vehicles for advertising,
Facebook still accounts for the vast majority of all social media ad revenue and will continue to do so over the next few years.
What advertisers value about social media is the ability to target so narrowly.
"I think one of the biggest things advertisers can leverage through social is multiple levels of targeting. Not just geo-targeting or contextual targeting or behavioral targeting, it's all of these things at the same time," Jed Williams, analyst and program director of BIA/Kelsey’s Social Local Media practice, told Media Life last year.
"I believe this is the biggest reason Facebook's valuation is what it is. It's not just the volume of data, it’s the personalization of that data. They have access to a social graph for each person on the platform. Now it's about leveraging that appropriately."
Facebook's dominance in online advertising will help make its case to investors, perhaps as early as tomorrow, when the company is expected to file its IPO.
Analysts say the company could be valued between $75 billion and $100 billion.
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