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UPDATE

Worldwide and U.S. Internet Ad Spend Report 2Q13:


Facebook Overtakes Yahoo! in the United States
Karsten Weide

Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

P.508.872.8200

F.508.935.4015

www.idc.com

IN THIS UPDATE
This IDC update reports the total volume and growth rate of the worldwide, regional,
and U.S. Internet advertising spending for 2Q13 and forecasts U.S. growth for 3Q13
2Q14. It also reports the top U.S. new media companies' quarterly domestic ad sales,
growth rates, and market shares, as well as spending on major ad formats and their
growth rates and market shares.
A spreadsheet containing this document's data is available to IDC clients by request.
Follow Karsten Weide on Twitter: @KarstenW.

IDC Opinion
Quarterly worldwide spending increased by 10.7% from $24.2 billion in 2Q12 to $26.8
billion in 2Q13. IDC also finds:
Quarterly U.S. spending expanded by 12.8% from $9.8 billion in 2Q12 to $11.1
billion in 2Q13. This is the second quarter in a row with a growth rate
substantially lower than those in 2012 (which had year-on-year rates of 1618%).
IDC therefore forecasts a moderate growth for 3Q13 of 13% to $11.7 billion and
predicts that spending for the entirety of 2013 will increase by 14.1% to $46.6
billion. This weakness is largely caused by slow growth in the "traditional" online
search and display advertising businesses, perhaps partly caused by intense
advertiser interest in mobile advertising.
Facebook grew its U.S. revenue by 51% (an almost 20-point jump in growth
compared with that of the last quarter) from $450 million in 2Q12 to $680 million
in 2Q13. Because of that strong growth and continuing weak sales for Yahoo!,
Facebook has now taken over Yahoo! as fourth biggest publisher after Google,
eBay, and Microsoft in the United States (refer to Figures 10 and 11 and Tables
7 and 8). In terms of international sales, Facebook took over Yahoo! back in mid2011.
U.S. mobile advertising continues to grow very fast. Mobile search advertising
grew by 72.3% from $0.6 billion in 2Q12 to $1.1 billion in 2Q13. Mobile display
advertising grew by 71.5% from $0.4 billion in 2Q12 to $0.7 billion in 2Q13.
Growth in both mobile search and display advertising is so strong now that these
two formats have begun to eat into the market share of online search and display
advertising (refer to Table 4 and Figure 7). This is good news for players that are
strong in mobile (Google and Facebook) and more bad news for players that still
primarily rely on online ads (Microsoft, Yahoo!, AOL, and New York Times).
Filing Information: August 2013, IDC #242667, Volume: 1
Worldwide New Media Market Model: Update

Overall, if one adds market shares for mobile and online search ad and for
mobile and online display ads, respectively, total market shares for search and
display ads remain largely unchanged.
U.S. online search ads grew by 4.3% from $4.5 billion in 2Q12 to $4.7 billion in
2Q13. Their market share declined from 43% in 1Q13 to 42.1% in 2Q13.
Google's U.S. search ad market share declined by about 2 points to 57.9%,
Microsoft added half a point to 11.7%. Yahoo! remained more or less flat at
6.2%, and it seems to have stopped the continuing market share loss of the past.
U.S. online display ad spend grew by 4.7% from $2.9 billion in 2Q12 to $3.0
billion in 2Q13. Display advertising's market share was down by half a
percentage point at 27.6% in 2Q13 compared with that of the previous quarter.
Google extended its lead in the segment by adding 1 percentage point with 25%
share. Yahoo!'s share was flat at 10.1%, as was Facebook at 9.4%.

Current Industry Dynamics


Worldwide Development
Figure 1 shows digital advertising spending by region; Table 1 shows spending and
growth rates by region in detail.

FIGURE 1
Worldwide Digital Advertising Revenue by Region, 4Q072Q13

Source: IDC, 2013

#242667

2013 IDC

TABLE 1
Worldwide Digital Advertising Revenue by Region, 3Q092Q13 ($B)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

6.5

7.3

7.1

7.3

7.6

8.4

8.0

8.5

8.7

9.8

9.4

9.8

10.3

11.4

10.7

11.1

-2.1

2.3

11.3

16.5

17.2

15.3

13.8

15.3

14.3

16.4

17.3

15.8

17.6

16.3

13.4

12.8

0.4

0.4

0.5

0.5

0.5

0.6

0.5

0.6

0.6

0.6

0.6

0.6

0.6

0.7

0.6

0.6

19.2

24.6

24.3

30.1

30.9

28.8

14.4

16.0

15.0

17.0

9.2

7.9

9.5

8.3

4.9

4.4

4.9

5.5

5.0

5.2

5.4

6.0

6.0

6.3

6.5

7.3

6.1

6.4

6.7

7.4

6.6

6.8

9.1

13.9

5.4

10.3

11.0

9.2

19.4

21.0

20.0

22.1

2.3

1.0

2.6

1.4

7.3

6.8

1.7

1.9

1.9

2.0

2.1

2.3

2.1

2.3

2.3

2.6

2.2

2.3

2.4

2.7

2.2

2.3

Year-over-year growth (%)

21.9

27.4

14.4

19.7

20.4

18.5

12.9

14.4

13.4

15.5

4.1

2.8

4.4

3.2

-2.5

-3.0

Asia/Pacific (excluding Japan)

1.5

1.7

2.0

2.0

2.1

2.3

2.6

2.7

2.8

3.2

3.3

3.5

3.6

4.0

4.0

4.1

Year-over-year growth (%)

19.6

24.9

35.2

41.4

42.3

40.0

32.0

33.7

32.6

35.0

28.9

27.3

29.2

27.8

19.9

19.3

Central and Eastern Europe

0.4

0.5

0.5

0.5

0.5

0.6

0.8

0.8

0.9

1.0

0.9

0.9

1.0

1.1

1.0

1.1

Year-over-year growth (%)

-14.0

-10.2

22.7

28.4

29.2

27.1

57.1

59.2

57.8

60.6

13.9

12.4

14.1

12.9

15.8

15.2

0.1

0.1

0.2

0.2

0.2

0.2

0.2

0.2

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

154.1

165.5

31.3

37.4

38.2

36.0

36.9

38.8

37.6

40.0

16.8

15.3

17.0

15.8

24.7

24.1

0.2

0.3

0.3

0.3

0.3

0.3

0.4

0.4

0.4

0.4

0.4

0.5

0.5

0.5

0.5

0.5

22.1

27.5

23.7

29.5

30.3

28.2

31.4

33.2

32.0

34.4

22.8

21.2

23.1

21.7

18.0

17.4

15.8

17.6

17.3

18.0

18.8

20.6

20.7

21.8

22.5

25.2

23.3

24.2

25.4

28.1

25.9

26.8

6.3

11.0

13.0

18.3

19.0

17.1

19.2

20.8

19.7

21.9

12.8

11.4

13.1

11.8

11.3

10.7

United States
Year-over-year growth (%)
Canada
Year-over-year growth (%)
Western Europe
Year-over-year growth (%)
Japan

Middle East and Africa


Year-over-year growth (%)
Latin America
Year-over-year growth (%)
Worldwide
Year-over-year growth (%)

Note: International growth rates include currency exchange rate influences.


Source: IDC, 2013

2013 IDC

#242667

U.S. Development
Figure 2 shows absolute digital advertising spending in the United States; Figure 3
outlines year-on-year growth rates for each quarter.

FIGURE 2
U.S. Digital Advertising Revenue, 4Q072Q13

Source: IDC, 2013

FIGURE 3
U.S. Digital Advertising Revenue Year-on-Year Growth, 4Q072Q13

Source: IDC, 2013

#242667

2013 IDC

Table 2 lists IDC's forecast for the year-on-year growth rates for 3Q132Q14; Figure
4 displays the growth rates and the predicted absolute spending based on these
rates.

TABLE 2
U.S. Digital Advertising Revenue, 3Q132Q14 ($B)

United States
Year-over-year growth (%)

3Q13

4Q13

1Q14

2Q14

11.7

13.2

12.2

12.6

13.0

12.5

12.1

11.7

Source: IDC, 2013

FIGURE 4
U.S. Digital Advertising Forecast Versus Actual Revenue Growth, 1Q102Q14

Source: IDC, 2013

Figure 5 shows U.S. revenue growth rate by major ad format, and Figure 6 shows
U.S. revenue growth rates of mobile online ads. Table 3 shows U.S. revenue and
growth rates by major ad format. Figure 7 and Table 4 outline market share numbers
for each ad format.

2013 IDC

#242667

FIGURE 5
U.S. Digital Advertising Revenue Growth by Format, 4Q072Q13

Note: Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads,
video ads, and interstitials.
Source: IDC, 2013

FIGURE 6
U.S. Mobile Online Ads Revenue Growth, 4Q072Q13

Note: Mobile ads do not include SMS/MMS ads.


Source: IDC, 2013

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2013 IDC

TABLE 3
U.S. Digital Advertising Revenue Growth by Format, 3Q092Q13 ($B)

Online search ads


Year-over-year growth (%)
Online display ads
Year-over-year growth (%)
Mobile search ads
Year-over-year growth (%)
Mobile display ads
Year-over-year growth (%)
Classified ads
Year-over-year growth (%)
Other ads
Year-over-year growth (%)

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3.6

4.0

3.8

3.8

3.9

4.2

3.9

3.9

4.0

4.4

4.4

4.5

4.6

5.1

4.6

4.7

-3.7

2.3

7.7

10.7

8.9

5.4

1.4

2.1

1.2

6.2

11.9

14.8

15.9

14.5

5.5

4.3

1.8

2.1

2.0

2.2

2.2

2.5

2.4

2.6

2.6

2.9

2.8

2.9

3.0

3.3

3.0

3.0

6.5

8.0

18.0

22.1

26.2

23.5

20.2

19.5

17.5

15.2

18.9

12.7

14.8

13.5

5.8

4.7

0.1

0.1

0.1

0.2

0.2

0.2

0.3

0.4

0.4

0.5

0.6

0.6

0.7

0.8

1.0

1.1

162.3

184.3

214.2

215.6

198.1

173.4

157.1

143.5

126.9

103.1

78.9

67.3

63.6

64.4

70.5

72.3

0.0

0.1

0.1

0.1

0.1

0.1

0.1

0.2

0.2

0.3

0.3

0.4

0.5

0.5

0.6

0.7

166.2

157.5

148.2

140.3

132.8

123.6

113.4

111.5

116.3

127.7

149.1

150.5

135.9

109.6

84.0

71.5

0.7

0.7

0.7

0.7

0.7

0.8

0.6

0.7

0.7

0.8

0.7

0.7

0.7

0.8

0.8

0.8

-20.8

-18.9

-4.9

5.1

4.8

8.3

-6.5

-0.6

-1.9

0.1

7.3

4.9

6.8

6.1

13.4

12.8

0.4

0.4

0.4

0.5

0.5

0.6

0.7

0.8

0.8

0.9

0.7

0.7

0.7

0.8

0.8

0.8

0.0

-1.6

15.3

25.8

32.3

32.9

78.5

67.3

64.2

58.4

-2.4

-12.5

-10.3

-10.8

13.4

12.8

Notes:
Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video ads, and interstitials.
Mobile ads do not include SMS/MMS ads.
Source: IDC, 2013

2013 IDC

#242667

FIGURE 7
U.S. Digital Advertising Revenue Share by Format, 4Q072Q13

Notes:
Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video
ads, and interstitials.
Mobile ads do not include SMS/MMS ads.
Source: IDC, 2013

#242667

2013 IDC

TABLE 4
U.S. Digital Advertising Revenue Share by Format, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Online search ads

55.4

54.4

54.4

51.9

51.5

49.7

48.4

45.9

45.6

45.4

46.2

45.5

44.9

44.7

43.0

42.1

Online display ads

27.2

28.2

28.2

29.4

29.3

30.2

29.7

30.5

30.1

29.9

30.1

29.7

29.3

29.2

28.1

27.6

Mobile search ads

1.0

1.2

1.7

2.1

2.5

3.0

3.9

4.5

5.1

5.2

6.0

6.5

7.0

7.3

9.0

10.0

Mobile display ads

0.6

0.7

0.9

1.0

1.2

1.3

1.7

1.9

2.3

2.6

3.5

4.1

4.5

4.7

5.7

6.2

10.1

9.6

9.4

9.1

9.1

9.0

7.7

7.8

7.8

7.7

7.1

7.1

7.1

7.1

7.1

7.1

5.7

5.9

5.4

6.5

6.5

6.8

8.5

9.4

9.3

9.2

7.1

7.1

7.1

7.1

7.1

7.1

Classified ads
Other ads
Notes:

Display ad revenue contains display ads proper (banner, rectangle, etc.), rich media ads, video ads, and interstitials.
Mobile ads do not include SMS/MMS ads.
Source: IDC, 2013

2013 IDC

#242667

U.S. Top New Media Companies


Table 5 lists the estimated quarterly U.S. net revenue numbers for the top new media
companies and their advertising partners. Figures 8 and 9 and Table 6 show the net
U.S. digital advertising growth rates for the same entities.

10

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2013 IDC

TABLE 5
U.S. Digital Advertising Net Revenue (Excluding TAC) by Entity, 3Q092Q13 ($B)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Google

1.98

2.24

2.25

2.33

2.52

2.93

2.93

3.04

3.24

3.63

3.53

3.62

3.80

4.18

4.04

4.07

Google ad partners

0.47

0.54

0.54

0.57

0.66

0.77

0.71

0.73

0.78

0.90

0.87

0.91

1.01

1.10

1.02

1.02

eBay

0.58

0.55

0.54

0.58

0.61

0.58

0.62

0.67

0.66

0.66

0.71

0.73

0.74

0.79

0.80

0.83

Microsoft

0.40

0.44

0.42

0.44

0.42

0.50

0.48

0.51

0.49

0.57

0.51

0.58

0.57

0.65

0.61

0.62

Microsoft ad partners

0.00

0.00

0.01

0.02

0.02

0.05

0.05

0.07

0.07

0.08

0.07

0.08

0.08

0.10

0.09

0.10

Facebook

0.14

0.18

0.21

0.24

0.26

0.34

0.31

0.37

0.37

0.43

0.39

0.45

0.51

0.59

0.52

0.68

Yahoo!

0.71

0.79

0.72

0.71

0.71

0.76

0.65

0.64

0.62

0.70

0.65

0.65

0.67

0.74

0.64

0.64

Yahoo! ad partners

0.24

0.27

0.25

0.25

0.26

0.09

0.03

0.03

0.03

0.03

0.03

0.03

0.03

0.03

0.02

0.02

IAC

0.12

0.13

0.14

0.14

0.13

0.14

0.16

0.16

0.16

0.19

0.22

0.22

0.24

0.26

0.26

0.28

IAC ad partners

0.03

0.04

0.04

0.04

0.04

0.04

0.05

0.05

0.05

0.05

0.04

0.04

0.04

0.04

0.04

0.05

AOL

0.23

0.26

0.23

0.21

0.21

0.23

0.22

0.22

0.21

0.25

0.22

0.23

0.22

0.27

0.23

0.23

AOL ad partners

0.08

0.10

0.07

0.05

0.05

0.06

0.06

0.07

0.07

0.07

0.08

0.08

0.08

0.09

0.08

0.08

YP

0.21

0.22

0.22

0.24

0.24

0.25

0.22

0.24

0.24

0.25

0.22

0.24

0.24

0.25

0.22

0.24

Walt Disney (DIMG)

0.06

0.06

0.06

0.06

0.06

0.07

0.07

0.08

0.08

0.09

0.08

0.09

0.09

0.10

0.08

0.09

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Notes:
Google ad partners net TAC payouts to AOL and IAC.
Microsoft ad partners net TAC payout to Facebook.
Yahoo! ad partners net TAC payout to eBay.
All fiscal quarters are normalized to calendar quarters.
Source: IDC, 2013

2013 IDC

#242667

11

FIGURE 8
U.S. Digital Advertising Net Revenue Growth (Excluding TAC) by Company,
4Q072Q13

TAC = traffic acquisition costs


Source: IDC, 2013

FIGURE 9
U.S. Digital Advertising Net Revenue Growth (Excluding TAC) of Facebook,
1Q092Q13

TAC = traffic acquisition costs


Source: IDC, 2013

12

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2013 IDC

TABLE 6
U.S. Digital Advertising Net Revenue Growth (Excluding TAC) by Entity, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

-11.6

-12.8

-12.3

-11.3

-11.7

-10.4

-4.9

1.7

3.7

8.2

2.3

4.2

3.3

8.0

3.9

3.1

-5.2

0.8

-12.9

-36.7

-34.8

-37.1

-16.0

31.1

29.5

21.8

23.9

17.5

15.5

27.7

7.1

7.7

1.4

-0.3

-2.4

7.6

4.0

5.7

14.6

15.3

8.3

14.4

13.9

8.3

12.3

18.4

13.1

14.0

174.7

158.1

160.8

127.9

86.4

82.3

47.3

50.4

41.4

28.6

27.2

22.5

37.3

37.6

32.1

51.0

4.8

11.8

20.7

27.0

27.3

30.9

30.2

30.5

28.5

24.0

20.7

18.9

17.3

15.0

14.3

12.5

Google ad partners

11.4

24.5

29.8

35.5

39.3

43.1

33.3

27.4

19.7

17.8

22.4

25.3

28.6

21.6

16.7

11.9

IAC

-1.6

10.5

33.2

24.7

10.6

8.3

12.6

14.6

24.1

37.9

39.1

41.4

44.8

38.1

19.0

27.1

-12.5

-0.1

10.8

24.7

38.9

18.7

23.8

14.6

8.7

14.1

-18.9

-17.6

-15.6

-7.1

19.0

27.1

-9.6

-14.9

5.7

11.1

6.3

14.0

12.5

15.7

17.2

12.5

8.3

13.3

15.6

14.7

18.0

6.8

Microsoft ad partners

-66.3

-81.3

-9.2

124.9

443.0

1,518.7

494.4

312.7

186.3

82.4

33.8

14.7

13.3

18.3

25.5

33.8

Walt Disney (DIMG)

-18.8

-7.0

14.8

10.8

16.8

17.2

20.7

39.0

27.7

19.5

10.2

8.0

15.2

13.8

5.9

0.4

Yahoo!

-14.9

-10.9

-3.7

-1.1

0.6

-4.5

-10.8

-11.0

-13.7

-7.5

1.1

2.2

8.9

5.8

-2.4

-1.9

1.9

5.0

5.2

8.2

9.7

-68.2

-88.4

-88.2

-89.2

-62.4

8.9

10.7

1.2

3.1

-39.9

-40.3

-2.3

-2.3

14.3

14.3

14.3

14.3

NA

NA

NA

NA

NA

NA

NA

NA

NA

NA

AOL
AOL ad partners
eBay
Facebook
Google

IAC ad partners
Microsoft

Yahoo! ad partners
YP

4Q10

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Notes:
Google ad partners net TAC payouts to AOL and IAC.
Microsoft ad partners net TAC payout to Facebook.
Yahoo! ad partners net TAC payout to eBay.
Source: IDC, 2013

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Figures 10 and 11 and Table 7 show the estimated net U.S. market shares (excluding
traffic acquisition costs [TAC]) for the top new media companies.
Table 8 presents the estimated gross U.S. market shares (including TAC) for the top
new media companies.

FIGURE 10
U.S. Digital Advertising Net Revenue Share (Excluding TAC) of Google,
4Q072Q13

TAC = traffic acquisition costs


Source: IDC, 2013

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FIGURE 11
U.S. Digital Advertising Net Revenue Share (Excluding TAC) by Company,
4Q072Q13

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Source: IDC, 2013

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TABLE 7
U.S. Digital Advertising Net Revenue Share (Excluding TAC) by Entity, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

30.4

30.7

31.8

31.8

33.0

34.9

36.4

35.9

37.1

37.1

37.5

36.9

37.0

36.7

37.8

36.8

Google ad partners

7.2

7.4

7.6

7.8

8.6

9.1

8.9

8.6

9.0

9.2

9.3

9.3

9.8

9.7

9.5

9.2

eBay

8.9

7.5

7.7

7.9

7.9

6.9

7.7

7.9

7.5

6.8

7.5

7.4

7.2

6.9

7.5

7.5

Microsoft

6.1

6.1

6.0

6.0

5.5

6.0

5.9

6.0

5.7

5.8

5.5

5.9

5.6

5.7

5.7

5.6

Microsoft ad partners

0.1

0.0

0.1

0.2

0.3

0.5

0.6

0.8

0.8

0.9

0.7

0.8

0.8

0.9

0.8

0.9

Facebook

2.1

2.5

3.0

3.3

3.4

4.0

3.9

4.4

4.2

4.4

4.2

4.6

4.9

5.2

4.9

6.2

10.9

10.9

10.3

9.7

9.4

9.0

8.0

7.5

7.1

7.2

6.9

6.6

6.5

6.5

6.0

5.8

Yahoo! ad partners

3.6

3.7

3.6

3.4

3.4

1.0

0.4

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.2

0.2

IAC

1.8

1.8

2.0

1.9

1.7

1.7

1.9

1.8

1.9

2.0

2.3

2.3

2.3

2.3

2.4

2.5

IAC ad partners

0.5

0.5

0.5

0.5

0.6

0.5

0.6

0.5

0.5

0.5

0.4

0.4

0.4

0.4

0.4

0.4

AOL

3.6

3.5

3.2

2.9

2.7

2.8

2.7

2.6

2.4

2.6

2.3

2.3

2.2

2.4

2.1

2.1

AOL ad partners

1.2

1.3

1.0

0.7

0.7

0.7

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.8

0.7

YP

3.2

3.0

3.2

3.2

3.1

3.0

2.8

2.8

2.7

2.6

2.4

2.4

2.3

2.2

2.1

2.1

Walt Disney (DIMG)

0.8

0.9

0.8

0.8

0.8

0.9

0.9

1.0

0.9

0.9

0.8

0.9

0.9

0.9

0.8

0.8

Google

Yahoo!

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Notes:
Google ad partners net TAC payouts to AOL and IAC.
Microsoft ad partners net TAC payout to Facebook.
Yahoo! ad partners net TAC payout to eBay.
Source: IDC, 2013

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TABLE 8
U.S. Digital Advertising Gross Revenue Share (Including TAC) by Entity, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

37.6

38.1

39.4

39.6

41.6

44.0

45.3

44.6

46.1

46.4

46.8

46.2

46.9

46.4

47.4

46.1

eBay

8.9

7.5

7.7

7.9

7.9

6.9

7.7

7.9

7.5

6.8

7.5

7.4

7.2

6.9

7.5

7.5

Microsoft

6.2

6.1

6.1

6.2

5.8

6.5

6.5

6.8

6.5

6.7

6.2

6.7

6.3

6.6

6.5

6.5

Facebook

2.1

2.5

3.0

3.3

3.4

4.0

3.9

4.4

4.2

4.4

4.2

4.6

4.9

5.2

4.9

6.2

14.5

14.6

13.8

13.1

12.8

10.0

8.4

7.9

7.4

7.5

7.3

7.0

6.8

6.8

6.1

5.9

IAC

2.3

2.2

2.5

2.4

2.3

2.1

2.5

2.4

2.4

2.4

2.7

2.6

2.7

2.7

2.8

3.0

AOL

4.8

4.9

4.3

3.6

3.4

3.5

3.5

3.3

3.2

3.3

3.2

3.1

2.9

3.2

2.9

2.9

YP

3.2

3.0

3.2

3.2

3.1

3.0

2.8

2.8

2.7

2.6

2.4

2.4

2.3

2.2

2.1

2.1

Walt Disney (DIMG)

0.8

0.9

0.8

0.8

0.8

0.9

0.9

1.0

0.9

0.9

0.8

0.9

0.9

0.9

0.8

0.8

Google

Yahoo!

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Source: IDC, 2013

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Figure 12 shows the gross and net U.S. digital advertising revenue market shares of
the top media companies in 1Q13 (with segmentation for net revenue and TAC).

FIGURE 12
U.S. Digital Advertising Revenue Share by Entity, 2Q13

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Notes:
Google TAC net TAC payouts to AOL and IAC.
Microsoft TAC net TAC payout to Facebook.
Yahoo! TAC net TAC payout to eBay.
Source: IDC, 2013

Figure 13 and Table 9 show the major players' U.S. net revenue shares in search
advertising. Figure 14 and Table 10 present the major players' U.S. net revenue
shares in display advertising.

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FIGURE 13
U.S. Online Search Advertising Net Revenue Share (Excluding TAC)
by Entity, 4Q072Q13

Source: IDC, 2013

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TABLE 9
U.S. Online Search Advertising Net Revenue Share (Excluding TAC) by Entity, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

50.3

51.4

50.9

50.8

51.7

56.4

58.7

57.8

58.8

60.0

59.0

56.1

56.4

57.9

60.5

57.9

Microsoft

5.5

5.6

6.3

6.9

6.9

6.8

7.9

8.4

8.8

8.7

9.5

9.7

9.8

9.7

11.3

11.7

Yahoo!

9.8

9.3

9.2

9.1

8.6

7.8

7.0

7.1

6.8

6.2

6.6

6.2

6.5

6.1

6.4

6.2

IAC

3.0

2.9

3.3

3.2

3.0

3.0

3.6

3.6

3.7

3.9

4.5

4.5

4.6

4.7

5.1

5.5

AOL

3.1

2.9

2.5

2.4

2.2

2.1

2.0

2.0

1.9

1.8

1.8

1.7

1.7

1.7

1.8

1.7

eBay

0.8

0.3

0.7

1.0

1.0

0.6

1.2

1.8

1.3

0.7

1.3

1.7

1.2

0.7

1.3

1.6

Google

TAC = traffic acquisition costs


Source: IDC, 2013

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FIGURE 14
U.S. Online Display Advertising Net Revenue Share (Excluding TAC)
by Entity, 4Q072Q13

Source: IDC, 2013

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TABLE 10
U.S. Online Display Advertising Net Revenue Share (Excluding TAC) by Entity, 3Q092Q13 (%)
3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

Google

6.7

6.7

10.9

13.4

15.6

15.8

18.8

20.9

22.4

21.1

21.6

23.5

23.5

21.3

24.1

25.0

Yahoo!

16.0

17.2

15.4

14.5

14.2

15.0

13.8

12.4

11.6

13.0

11.4

11.4

10.8

11.5

9.9

10.1

Facebook

5.5

6.2

7.3

7.8

8.1

9.1

9.7

10.7

10.6

11.1

11.0

11.4

11.0

10.1

9.2

9.4

AOL

6.9

7.0

6.5

5.5

5.3

5.7

5.8

5.4

5.3

5.9

5.0

5.2

4.7

5.5

4.9

5.0

Walt Disney (DIMG)

3.1

3.1

3.0

2.8

2.9

2.9

3.0

3.3

3.1

3.0

2.8

3.1

3.1

3.0

2.8

3.0

11.1

10.7

9.0

8.2

6.7

8.6

7.0

7.1

5.5

6.2

3.6

5.1

3.9

4.8

3.0

2.5

IAC

0.7

0.6

0.7

0.7

0.6

0.6

0.7

0.6

0.6

0.7

0.7

0.7

0.7

0.7

0.8

0.9

eBay

1.4

1.3

1.1

1.1

1.1

0.5

0.3

0.3

0.3

0.4

0.3

0.4

0.4

0.5

0.6

0.5

Microsoft

DIMG = Disney Interactive Media Group


TAC = traffic acquisition costs
Source: IDC, 2013

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Future Outlook
IDC forecasts U.S. spending will grow by 13% to $11.7 billion in 3Q13 and predicts
spending for the entirety of 2013 will increase by 14.1% to $46.6 billion.

Essential Guidance
Sales in the second quarter continued the sluggish growth that began in 1Q13; the
economic outlook for both the United States and the world remains uncertain, and
IDC expects slow growth to continue. Weak growth is caused by slow sales in online
ads, whereas mobile ads continue to grow at a breakneck pace.

LEARN MORE
Related Research
Worldwide New Media Market Model, 1H13: Worldwide and U.S. Data (IDC
#242211, June 2013)
Worldwide and U.S. Internet Ad Spend Report 1Q13: Slow First Quarter, Muted
2013 Outlook (IDC #241094, May 2013)

Methodology
This IDC update tracks the total volume and growth rate of the worldwide, regional,
and U.S. Internet advertising spending for the preceding quarter and forecasts U.S.
growth for the succeeding four quarters. It also reports the top U.S. new media
companies' quarterly domestic ad sales, growth rates, and market shares as well as
spending on major ad formats and their growth rates and market shares.
For U.S. companies' numbers, this document for the most part ignores that share of
the revenue called traffic acquisition costs (TAC). Some of the companies this
document covers run networks of third-party Web sites on which they sell ad space,
thereby generating additional revenue. Traffic acquisition costs are the part of this
revenue that they pay out to the partners in their networks. We call revenue including
TAC gross revenue and revenue excluding TAC net revenue. As far as particular
companies' results are concerned, this document almost exclusively discusses net
revenue because that is the amount of money that remains with a company, is at its
disposal, and influences its future capabilities and competitiveness. We do, however,
address gross revenue at some points because it is a measure of control over the
market.
This document is based on a model that is populated with data from companies'
quarterly and annual reports, earnings calls, interviews with company representatives,
news coverage, and estimates.

2013 IDC

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To calculate the net U.S. Internet advertising sales market shares, the model looks at
the quarterly total gross Internet advertising revenue of the following top U.S. new
media operations:
AOL
eBay
Facebook
Google
IAC
Microsoft (Online Services Division [OSD] plus ad revenue in the Windows Live
division)
Walt Disney
Yahoo!
YP
Where detailed numbers are not available, the model calculates revenue and market
shares as follows: From the companies' total gross advertising revenue, the model
first subtracts TAC (where applicable), thus arriving at their total net revenue. From
this total net revenue, it then subtracts the international portion of each company's
sales (where applicable). This way, the model arrives at the net U.S. advertising
revenue (excluding TAC) of each company. By adding each company's revenue, we
arrive at their total U.S. Internet advertising revenue.
In the next step, the model estimates the total U.S. Internet advertising volume by
assuming that the top companies stand for about 80% of the market that is, that
the residual, long-tail market represents 20%. Then the model calculates the market
share of each major company by expressing it in relation to the overall market
volume.
To forecast U.S. ad spending for 2Q131Q14, the model assumes that growth rates
follow a historically established exponential decay curve as the digital ad market
matures, adjusted by the leading economic indicator for the United States as made
available by the University of Ohio.
To estimate current spending on search ads, display ads (comprising display ads
proper [such as banner and rectangle ads], rich media ads, video ads, and
interstitials), classifieds, and "other" ads, the model follows a similar approach as
described for overall digital ad spending previously. It also establishes each ad
format's growth rate and market share.
The model estimates quarterly ad spend in Western Europe, Japan, Asia/Pacific
(excluding Japan) (APEJ), Canada, Central and Eastern Europe (CEE), Middle East
and Africa (MEA), and Latin America based on the forecast of the Worldwide New
Media Model and Forecast (NMMM), adjusted with data on recent spending.

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All numbers are nominal (current) dollar amounts as they report actual current
spending. All growth rates in this document are annual (year-on-year) growth rates.
For the sake of comparability, any data relating to companies not on calendar
business years (Microsoft and Walt Disney) is normalized to calendar quarters. For
example, when we talk about Microsoft's third-quarter results, we mean the third
calendar quarter of a given year, not Microsoft's third fiscal quarter.
The ad spend report model is continuously being updated and modified to improve
estimates; companies' restated results are corrected and errors are fixed. Numbers
are therefore liable to change. In this edition, the following changes were made:
Updated forecast 2013 regional total digital advertising numbers based on most
recent numbers in latest New Media Market Model (1H13)
Broke out mobile search and display ad spending and their respective market
shares

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