Thursday, November 02, 2006

Social Networks Ad Spend: $2B by 2010

An eMarketer study points out the rapid growth of ad spending on social network sites.

From the press release:

"Just four months ago, marketers were sitting on the sidelines of social networks and watching the traffic surge. Now, advertising on social networks has become a top priority. In 2007, ad spending on US social networking sites is expected to spike to $865 million from $350 million in 2006, according to eMarketer's new report, Social Network Marketing: Ad Spending Update. By 2010, eMarketer estimates, spending will hit $2.15 billion.

MySpace will continue to dominate social networks, accounting for 60% of total US online social network ad spending in 2007. eMarketer estimates MySpace will generate $525 million in 2007, up from $180 million in 2006. Competitors such as Facebook, Bebo and Piczo will make up the second-largest chunk of revenue, followed by social networks offered by portals and "niche" networks.

International expansion remains a key area for audience growth and will shift into high gear in 2007. eMarketer estimates that worldwide social network ad spending will reach $1.1 billion in 2007, up from $445 million in 2006. By 2010, spending is expected to rise to $2.8 billion.

"The longer existing social networks take to develop adequate ROI metrics, the bigger the opening for a next generation of networks that are built from the ground up to accommodate advertising," Ms. Williamson says.

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