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Q2 Report: Online Advertising Strong Across All Channels

Facebook and Google Doing Especially Well

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Online advertising spend showed a strong second quarter across all channels despite continuing uncertainties from the economy and higher gas prices, according to a new report from IgnitionOne.

The report is based on a survey of digital media that showed increases in year-over-year spend across paid search, display advertising, and Facebook. Facebook advertising, the firm says, was particularly strong.

This would somewhat reflect another recent report from MerchantCircle, which found that Facebook ads are gaining popularity among small businesses.

According to the IgnitionOne survey, Facebook advertising spend is up 22% year-over-year on a same-client-basis, with impressions up 11%.

Facebook Ads

“However, 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 200% increase in impressions YOY,” IgnitionOne tells WebProNews. “Spending patterns within an advertiser’s campaign lifecycle show marked growth declines after the first few months, suggesting advertisers are still in a ‘test and learn’ phase with the new and immature ad platform.”

Despite the increasing success of Facebook ads, Google was still the “standout performer,” according to the firm. Google showed grew to 80% share of all U.S. search advertising spend in Q2, compared with Yahoo/Bing at 19% share. “Google also saw dominating growth in other key search metrics, including impressions, clicks, CTR and eCPM,” the firm tells us. “Google’s AdEx commands 51% share of U.S. RTB display spend, compared to Yahoo!’s Right Media at 49% share. This marks a significant jump in Google’s market share in display YOY.”

It will be interesting to see how a jump in market share might impact a pending Department of Justice probe of Google’s pending acquisition of ad-optimization platform AdMeld. The investigation is aimed at determining if Google’s dominance in search advertising could make this an anticompetitive buy, and will examine Google’s plans for expansion strategies related to the acquisition. Google, of course, says that this is not an anti-competitive acquisition.

“The acquisition is designed to help publishers get the most from the rapidly growing display advertising industry, which is both complicated and incredibly competitive — the emergence in recent years of a huge variety of technologies for publishers, like Admeld’s, is great evidence of that,” a Google spokesperson is quoted as saying. The Federal Trade Commission has since launched its own antitrust investigation into Google’s broader business practices.

U.S. paid search spend grew a steady 12% year-over-year in Q2, and was flat compared with Q1 growth, according to IgnitionOne. “The quarter began strong, but dipped sharply in June to nearly flat growth on a YOY basis,” the firm says. “While this decline did not have a significant impact on the quarter overall, it could be an indicator of future months’ performance, and expectations for Q3 are cautiously optimistic.”

Google launched its latest attempt at a social network today. While it is being released under the veil of an early-stages project, it will be interesting to see what impact it might have on Google’s advertising offerings in the months and years ahead.

Q2 Report: Online Advertising Strong Across All Channels
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