Social Network Ad Spending Outlook

Focus on paid advertising diminishes

NEW YORK (Dec. 22, 2009) -- Going social is no longer an experiment for marketers; it is a reality. There is no question that companies and brands are investing real dollars in social network marketing. 2009 will end with major shifts in advertising spending in this area.

eMarketer estimates that marketers will spend $1.2 billion on paid social network advertising in the US in 2009, rising 7.1% to $1.3 billion in 2010.

Worldwide, paid social network advertising is expected to reach $2.2 billion in 2009 and $2.5 billion in 2010, a 14% increase.

Marketers will continue to make social networks a priority for 2010, but a significant portion of their spending will go toward building and maintaining a social network presence—known as earned media. Paid social network advertising will remain somewhat of an afterthought.

“Concepts such as earned media, local social advertising, social search and social ad networks will be key themes next year,“ said Debra Aho Williamson, eMarketer senior analyst and author of the report “Social Network Ad Spending: 2010 Outlook.”

“Paid advertising will not be the primary focus, but it will serve to drive traffic and engagement with the larger social network presence,” Ms. Williamson added.

Facebook, at 350 million users worldwide, is the premier destination for marketers in the US and many worldwide markets. It will surpass its former rival, MySpace, in ad revenues in 2010. Also in 2010, Facebook will account for nearly one-quarter of all social network ad spending worldwide, up from 20% in 2009.

As more marketers incorporate social networks in their business, they will no longer look at them as siloed destinations. Instead, they will look to increase the impact of their social network presence by linking it to other marketing initiatives, both online and offline.

Source: eMarketer