Social Network Adspend To Reach $2.8 Billion

The report says that US marketers will spend $350 million placing ads on social network sites in 2006, up from its previous estimate of $280 million.

EMarketer says that it has revised its expectations upwards owing to the pace of events since August, which amongst other things, saw Google’s $900 million deal with MySpace and the trickle down effects this brought with it.

By 2007, US adspend on social networking sites is forecast to reach $865 million, before breaking the $2 billion barrier in 2010.

Debra Williamson, eMarketer senior analyst and author of the Social Network Marketing: Ad Spending Update report, said: “MySpace will continue to dominate, accounting for 60% of US online social network ad spending in 2007.

“Networks including Facebook, Bebo and Piczo will make up the next largest chunk of revenue, followed by social networks offered by portal sites. Vertical, or ‘niche,’ networks are likely to generate $45 million in ad revenue in 2007.”

Social network ad spending will account for 2.2% of the $15.9 billion spent on US online advertising in 2006 and 4.7% of the estimated $18.3 billion spent in 2007, according to eMarketer.

By 2010, it will account for 8.5% of the estimated $25.2 billion US online advertising market.

Williamson added: “The numbers speak for themselves. Projected growth in ad spending on social networking sites of 147% in 2007 shows that marketers are enthusiastic about the space. The race is on to capture their ad dollars.”

In the first six months of 2006, online advertising expenditure has reached almost &1 billion and looks set to overtake spending on national press advertising before the end of the year, according to recent research from the Internet Advertising Bureau, PricewaterhouseCoopers and the World Advertising Research Centre (see UK Online Adspend Nears £1 Billion).

A recent study from comScore Networks revealed that users of the top social networking sites demonstrate particularly high levels of engagement, with visitors to MySpace.com and Bebo.com averaging at least 5 usage days, 2 hours of use, and 300 pages viewed per visitor during July (see User-Generated-Content Websites Show Large Traffic Growth).

Source: eMarketer