Facebook beats Yahoo in display ads, is it a big deal?
Posted by Catherine Sackville-ScottStatistics released by comScore late last week suggest that social networking site Facebook is at the forefront of the US display ad market. Facebook ad views accounted for 16.2 % of the market’s total, surpassing all online publishers including giants such as Yahoo and Microsoft.
The report from comScore, a leading digital marketing intelligence agency, shows that a total of 1.1 trillion display ads were shown to American users during the first quarter of 2010, 15% more than the same period last year. Of those, Facebook racked up a massive 176.3 billion display ad impressions.
Yahoo still makes substantially more profit from display ads however, due to their extensive network which serves ads on sites other than their own, combined with the poor click-through rate for Facebook ads. Nevertheless the social networking site is reportedly poised to reach billion dollar revenues for the first time this year.
Rumours that Facebook will launch its own ad network have circulated the internet for a long time. In a bid to extend its online presence, Facebook is said to be looking to improve opportunities for engagement with consumers through its range of instant personalisation products and social plugins.
Display ads questioned
Experts remain sceptical of the return on investment for display ads when not used in conjunction with search. Head of Search at Clickthinking Rob Stanbridge said that Facebook’s lenient privacy settings may have inflated the impression count, and that user engagement with advertising on social networks is uncertain.
“We need to question the interaction of users with Facebook display ads. How effective was the click-through rate, and what was the return on advertising spend (ROAS)? People generally visit social networks to interact with other users, not to look for products and services. If they want this kind of information they are far more likely to visit a search engine.”
The point is that neither channel should be celebrated independently. Studies have found that different online advertising models are effective when used in conjunction with one another. A 2009 report from iProspect identified the symbiotic relationship between the search and display channels, manifested in the finding that “almost as many Internet users respond to online display advertising by performing a search on a search engine (27%) as those who simply click on the ad itself (31%)”.
Conversion strategies are better implemented across multiple channels. The challenge is in executing campaigns in the right way to maximise exposure across the channels and measuring and improving return on investment.