Digital Display Ads to Overtake Search, Bringing a Reckoning for Google

As advertising keeps flooding over from television to digital screens, this year will mark a first: More online ad dollars will go to ads that aren’t for search results than to those that are.

That’s per eMarketer, which measures this sort of stuff. A Monday report claims that spending on display ads — banners, videos, sponsored content and in-stream mobile promotions — will outpace search ads in 2016. The research firm estimates that U.S. spending on display will hit $32.2 billion this year (a 47 percent annual growth), overtaking spending on search (estimated at $29.2 billion, a 10 percent growth).

That trend does not bode well for Google, which reaps the lion’s share of search ad revenue. Of course, the search giant also reaps other ad money — from its massive banner business and YouTube, primarily.

But in this category of digital ads, Facebook is a far greater foe. Figures from eMarketer show that Facebook claimed just under 30 percent of U.S. display ads in 2015, more than twice Google’s share. Plus, many in the industry see Facebook’s nascent automated ad platforms as a potential threat to Google.

Google knows this — that the tremendous profitability of its search business will peter out eventually. Hence the importance of Alphabet: It is scouring for some business after search.

This article originally appeared on Recode.net.

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