For the first time, online advertisers in the United States will spend more advertising dollars on display ads than on search ads, according to 2016 predictions from research firm eMarketer.
Spending on display ads – including banners, videos, sponsorships, and rich media ads – will increase by 23% from $26.2 billion in 2015 to a record $32.2 billion in 2016.
On the other hand, the growth of search ads – which are text advertisements served in a search engine’s results page as a direct response to a searcher’s query – is expected to slow to just 10.2% this year. The increase from $26.5 billion in search ad spend in 2015 to $29.2 billion in 2016 is significantly lower than the 13.2% rise the previous year.
Advances in display advertising technology, options, and capabilities are in part driving the increase in display advertising spend over search ads. With more options – such as programmatic buying, video, and social – and better placement and tracking tools, display advertising is becoming more attractive to advertisers.
Facebook vs. Google: Battle for Display Ad Revenue
Facebook is expected to widen its lead over Google in digital display ad revenues in 2016, according to eMarketer. While Facebook is projected to take another one percent of the revenue share in 2016 (26.2%), Google’s display ad revenue share will drop from 13% in 2015 to just 11.8% in 2016.
Twitter joins Facebook in seeing a positive trend in display ad revenues, increasing revenue share from 5% in 2015 to 5.9% in 2016, while Yahoo joins Google in declining from 4.6% to 3.9% over the same time period.
Facebook and Twitter’s improved display advertising revenues are tied to increased spending on mobile advertising, which coincides with a historic 2015 for mobile, surpassing desktop in both Google search queries and display ad spending in the US for the first time.
eMarketer projects some of the same trends for 2017, including a widened gap in display ad revenue between social media companies and search engine companies, display ad spending continuing to outpace search, and increased display ad spending on mobile devices.
