Facebook Ad Prowess on Full Display

Really significant new research indicates that Facebook has displaced Yahoo for the first time as the No. 1 revenue-generating site when it comes to display ads.

David Hallerman, eMarketer principal analyst, estimates that display ad revenue for the social network will rise 80.9% to $2.19 billion this year. Facebook’s ability to capture 21.6% of all U.S. display ad dollars takes the No. 1 space traditionally held by Yahoo, which should still see 16.4% growth in display ad sales this year and 16.3% in 2012.

You have to be on Facebook because that’s where the people are
This development is significant because it demonstrates Facebook’s transcendence from “just a social networking site” to a true destination. A clearinghouse for virtually everything. As comScore’s August 2010 research further supports, Facebook is also second only to YouTube in online video viewership.

Yahoo has traditionally attempted to connect eyes to ads via the lure of its original content (particularly after it lost contender status in search.) And it’s had a long, effective run. But Yahoo is now clearly in its twilight years. The gravitational pull toward Facebook now means that advertisers have a new, primary hub to consider for their display ad dollars.

Sure, Facebook’s current ad offering isn’t that creatively-enticing at first glance – a 110 x 80 pixel image and a tweet’s worth of text. It will be interesting to see if Facebook eventually offers more advertising options and, if they do, if the user base will riot in the streets. But the remarkable segmentation and targeting opportunities Facebook affords makes it really powerful. And these new spending numbers make it impossible to ignore.

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