Look Out, Google: Display Ads Soon Will Leapfrog Search Ads

Not so long ago considered the poor stepchild to Google's mighty search ads, display ads now are making a comeback more than two decades after making their debut on the Web.

Revenues from display ads, which include those not only those hated banners but, more to the point today, mobile, video, and so-called native ads, will overtake search ads this year, according to a new report from eMarketer.

Search ads, which are mostly Google ads, edged out display ads in 2015, with $26.53 billion to display's $26.15 billion. But this year, display ads will hit $32.2 billion to search's $29.2 billion. And eMarketer reckons display, driven by banners (including native ads such as Facebook's news feed ads and Twitter's Promoted Tweets), video ads, and rich media ads, will continue to hold the lead until at least 2019, when they will reach $46.7 billion to search's $40.6 billion.

Why the turnaround? In a word, Facebook. Its 40% growth, thanks to its unique combination of targeting and broad worldwide reach, clearly has made digital advertising a two-horse race.

This doesn't actually mean Google is in imminent trouble. Search ads are still growing, even in the mobile age when people are doing relatively fewer searches (perhaps unless you count rapidly growing searches by voice). And Google also has not only a large if not as profitable business in syndicating display ads to some 2 million partner websites, it also has YouTube, whose video ads are another significant driver for display.

Nonetheless, Google is under fire from Facebook--which is why it's firing back with similar new ad formats such as app install ads and similar ways of allowing advertisers to use customer data to help target ads to likely prospects.

By the way, in case you think you've heard some of this before, you're right. The data eMarketer cites is its own, from back in September. But other market researchers predicted the switch in 2016 three years ago.

Although Facebook's seemingly endless opportunities in display ads of many kinds means the trend could well continue, it's no sure thing. Banners and video ads, not search ads, are the reason people are installing ad blockers left and right, on their phones and their computers. If that parallel trend continues, display ads may run into a slowdown once again.

Still, the new ascendance of display ads is a milestone, even if that milestone speaks less to the utility of the ad formats themselves than to Facebook's advertising juggernaut.