June 29th, 2011

Online Ad Spend Up, Facebook Soars 22%

Media Post

Despite economic uncertainties and higher gas prices, online ad spending showed a strong second quarter across all channels, according to new findings from IgnitionOne.

The digital ad shop, until recently known as SearchIgnite, found increases in year-over-year spend across all three major online media channels, including paid search, display and Facebook.

Even amid Facebook’s rise, Google was again the standout performer. It showed significant gains in year-over-year search spending and significant market share traction for its AdEx display platform.

Specifically, U.S. paid-search spend grew a steady 12% year-over-year in the second quarter, while growth was flat quarter-over-year, according to IgnitionOne.

As such, the quarter began strong, but dipped sharply in June to nearly flat growth on a year-over-year basis.

While this decline did not have a major impact on the quarter overall, it could be an indicator of future months’ performance. Expectations for the third quarter of the year are now cautiously optimistic, according to IgnitionOne.

Still, Google grew to an 80% share of all U.S. search advertising spend in the second quarter, compared with Yahoo/Bing at a 19% share. Google also saw dominating growth in other key search metrics, including impressions, clicks, CTR and eCPM.

What’s more, Google’s AdEx now commands 51% share of U.S. RTB display spend, compared to Yahoo’s Right Media at a 49% share. Year-over-year, “This marks a significant jump in Google’s market share in display,” IgnitionOne found.

Meanwhile, Facebook ad spending is up 22% year-over-year on a same-client-basis, with impressions up 11%. Furthermore, Facebook advertising has experienced high rates of growth from new marketer adoption in the past year, contributing a 280% increase in spend across all clients and a 200% increase in impressions year-over-year.

That said, spending patterns within an advertiser’s campaign life cycle on Facebook show marked growth declines after the first few months, suggesting that advertisers are still in a “test and learn” phase with the new and immature ad platform.

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