While Facebook is not making the most money of any of its competitors from advertising, new comScore numbers indicate that it has become the largest display advertiser on the Web. The Wall Street Journal writes that the data, which is scheduled to be released later this week, “are the latests to show Facebook closing the gap with more established Internet-ad giants”.
According to comScore’s CMO Linda Abraham, the jump in display advertising on Facebook could be a result of the site’s redesign, which allowed more advertisements to be squeezed in on each page. Abraham also speculated that the takeover of advertising from Microsoft didn’t seem to be a primary factor.
As we argued when Facebook took over Microsoft’s share of onsite advertising, this all seems to be part of Facebook’s larger advertising strategy. Not two weeks after giving Microsoft the boot, Facebook began accepting PayPal, making advertising for its 400 million users a much simpler reality. The company’s press release on its relationship with PayPal directly spoke to this goal, saying that “the option to pay with PayPal makes it even easier for advertisers, particularly small international companies, to run campaigns on Facebook”.
These efforts appear to have paid off, as Facebook has delivered 176.3 billion display ads in the first quarter of 2010, pulling well ahead of Yahoo’s 131.6 billion banner ads and Microsoft’s 60.2 billion ads. As the Journal points out, however, the revenue from these ads falls far behind Yahoo and Microsoft. Facebook earned $500 million in 2009 and is expected to earn more than $1 billion in 2010, while Yahoo earned $6.5 billion in 2009, mostly from advertising revenue.
Facebook is still growing, however, and we can only wonder what advertising moves the company has in store regarding its controversial Open Graph. Already, it must be making some interesting deals, such as its “Instant Personalization” connections with Yelp, Pandora and CNN. While display advertising may be an easy way to compare Facebook with giants like Yahoo and Microsoft, it might be only a fraction of what Facebook has in store for us.
