US Ad Dollars Moving To Social Network Websites
US advertisers are increasingly shifting ad dollars to social networking websites from portal sites, reports eMarketer.
“Social networking is proving to be a true revenue driver,” said Debra Aho Williamson, eMarketer senior analyst and author of the recent report, Social Network Advertising: Where to Next?
Three factors are driving increased revenue for MySpace. It has begun beta testing a new targeted advertising tool that will significantly increase CPMs. Parent Fox Interactive Media’s deal with Google to supply search technology is providing increased revenue. Lastly, MySpace’s international business has ramped up significantly.
Facebook, meanwhile, has achieved tremendous growth since opening up its site to the general public, and now has 31 million active users, up from 8.9 million in September 2006.
Advertising on social networks has exploded in recent years, with marketers predicted to spend $900 million in the US in 2007. By 2011 that figure will more than double to $2.5 billion, eMarketer predicts.
“Based in part on MySpace’s strong performance and additional traffic to Facebook, eMarketer plans to revise upward its forecast for social network ad spending,” Williamson said.
In August, a report from Juniper Research found that social networking services will dominate a burgeoning market for mobile user-generated content (see Mobile UGC Revenues To Rise Tenfold By 2012).
Earlier in the year, In-Stat published a report looking at social networks, which said that although they have been experiencing massive growth in recent years, their future remains uncertain (see Uncertain Future For Social Networking Sites).