Yahoo!, more than any other company, built the online display advertising market. While it was still considered a directory, Yahoo! started offering online display advertising and did quite well with it because, after all, it was the most trafficked website online for the longest time. Then, PPC advertising took off – primarily because Google was the first company to build a scalable model that addressed the needs of advertisers.
For the longest time, these two companies grew their respective advertising channels. Yahoo! focused on large corporations with big budgets who were used to advertising on television. Google focused on the small business and the entrepreneur who wanted to pay based on results.
Once PPC advertising caught on, smaller companies who were advertising with display ads online made the switch. PPC grew, online display advertising declined. Now, display ads are making a comeback.
And guess who’s leading the charge? That’s right, Google.
In fact, Google is now the leading online display advertising provider. Yahoo! is No. 2. And in a very close third is Facebook.
As AdAge points out, online display advertising revenues grew 23% in the first quarter of 2011, which means it grew faster than search. I think, very soon, we’re going to see a two horse race in the online display advertising channel with Facebook and Google competing head to head for the same customers. Yahoo! will fall to third and hold onto its share of the corporate advertiser – those companies who seem to be late in adopting the most innovative advertising models.
Who do you think will win this race? Will it be Facebook, the most trafficked online property today, or Google, with its lead in diverse channels and a proven scalable system?