US social networking adspend forecast to fall 3% in 2009

Total social network ad spending in the US will fall 3% to $1.1 billion in 2009, from $1.2 billion in 2008, according to a new forecast from eMarketer.

This is a significant turnaround from previous years, when spending grew an estimated 33% in 2008 and 129% in 2007, said eMarketer.

The primary reason for the change is a projected falloff in ad spending on MySpace, which accounts for nearly one-half of US social network ad spending. In December 2008, eMarketer estimated that marketers would spend $630 million to advertise on MySpace in the US in 2009. Now eMarketer projects that US ad spending on MySpace will reach just $495 million this year, down 15% from the estimated $585 million MySpace generated in 2008.

Debra Aho Williamson, eMarketer senior analyst, said: “Although ad spending on social networks is diminishing, marketers are still very focused on using social networks for other purposes, such as public relations or customer relationship management.”

Estimates for ad spending on MySpace and Facebook outside of the US show that marketers are expected to spend $520 million to advertise on MySpace in 2009, with $495 million coming from the US and $25 million from other markets.

International spending on Facebook is expected to reach $70 million this year, for a total of $300 million in 2009.