Google to Expand Display Ad Business to 20 Billion+

Google may be the big fish of search, mobile, and – well, you get the idea. However, they’re still in third place for display advertising. That’s about to change, though, with Google aiming to expand their display ad sector to over $20 billion in value.

Google’s Booming Display Ad Business

While Google is sitting pretty at $29 billion in annual revenue, the vast majority still comes from simple text ads – and primarily those located directly on the Google search page.

“It would be good to have more diversified revenue,” stated Google’s Chief Executive, Eric Schmidt, speaking in the Cannes Lions advertising festival, according to Reuters. In pursuit of this diversity, Google has already lunged into the display ad sector with vigor. The AdMeld acquisition being the company’s most recent relevant investment.

In discussing the company’s current position in the display ad market, Schmidt stated, “I would argue that we’re doing really well there. We started off with largely text ads, and now we have this display business which is going to end up being a $10 billion, $20 billion kind of business.”

Exactly how the company will get to that point, however, is uncertain. Will the increased prominence of display ads be due to further acquisitions, more successful targeting, continued expansion of the display network, or – perhaps – a Google social network that garners massive ad impressions in the way that Facebook currently does?

The State of the Market

Display Ad Revenues 2009-2012 Emarketer

Mimicking Facebook’s approach may be the wisest path to dominance for display ads, at least if Google can actual pull off social. Facebook, according to eMarketer, is likely to not only pass Yahoo as the top company for display ads but to do so by a wide margin. eMarketer’s predicted figures put Facebook at 17.7 percent market share by the end of the year (a 5.5 percent increase) to Yahoo’s 13.1 percent (a 1.3 percent decrease).

Google, meanwhile, rests uncomfortably in third place, with eMarketer predicting 2011 will see a 0.7 percent increase for the company, putting it at 9.3 percent total market share. That doesn’t put Google out of the race, though. With continued acquisitions, improved video ads in YouTube, and the always-anticipated innovations of Google, display ads may be just one more territory for Google to conquer.

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