Marketers to Cut U.S. Social Network Ad Spend in '09

  |  July 9, 2009   |  Comments

EMarketer predicts major sites will suffer this year, but report doesn't measure many forms of spending. MySpace will enjoy more than double Facebook's ad revenue this year.

EMarketer has sharply lowered its outlook for ad spending on social networks in this country. A new report from the researcher finds such expenditures will fall 3 percent to $1.1 billion this year as marketers continue their retrenchment in the poor economy.

The report predicts growth will resume in 2010, when spending is expected to rise 13.2 percent to $1.3 billion. In 2011 it may climb another 8.2 percent to $1.4 billion.

The report, titled "Social Network Ad Spending: A Brighter Outlook Next Year," aggregates data from a number of firms, including Magna, Forrester, and Comscore. Ad spending on several non-standard social media marketing formats is not included, it's important to note.

Among major social media platforms, eMarketer concludes MySpace still leads Facebook in U.S. ad spending by a considerable margin. However Facebook's prospects are better both in the U.S. and globally. In the current year News Corp.'s lurching MySpace subsidiary will suffer a 15 percent drop in U.S. ad revenue, to $495 million, while ad spending on Facebook will climb 9 percent, to $230 million. Even with the narrowing gap between the two, eMarketer believes MySpace will enjoy more than double the ad revenue Facebook will this year. eMarketer believes Facebook will surpass its bigger cousin in 2011.

Globally, media planners will allocate a total of $520 million to MySpace this year, down 14 percent from 2008. Worldwide spending on Facebook, by contrast, is anticipated to grow 20 percent to $300 million.

"The expected rebound in spending will come as more companies focus on creating and implementing an overall social marketing strategy," said eMarketer Senior Analyst Debra Williamson, the report's author, in a statement. "Regardless of which site is in the lead, 2009 is the year of building social marketing strategy. 2010 and beyond will see increased activity and deployments."

Facebook and MySpace aside, eMarketer expects slight growth (1.4 percent) in advertising on "other destination social networks." And spending on "widgets and applications" will almost double, from a meager $40 million in 2008 to a slightly less meager $70 million in 2009.

For the most part, the spending report does not cover social marketing expenditures that don't occur on destination social media sites and related apps. For instance, white label social network platform Ning offers ad monetization through Google AdSense and affiliate partnerships. Likewise some ad networks and vendors have begun to package user segments based on social data, independently of the major players. For instance, Media6Degrees combines behavioral targeting with information mined from social interactions to create segments of like-minded people. These can be incorporated into ordinary media buys.

Further, marketers are investing more money in building experiences on social media platforms, including Twitter experiments and Facebook pages, that have little to no ad support.

ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

US Consumer Device Preference Report

US Consumer Device Preference Report
Traditionally desktops have shown to convert better than mobile devices however, 2015 might be a tipping point for mobile conversions! Download this report to find why mobile users are more important then ever.

E-Commerce Customer Lifecycle

E-Commerce Customer Lifecycle
Have you ever wondered what factors influence online spending or why shoppers abandon their cart? This data-rich infogram offers actionable insight into creating a more seamless online shopping experience across the multiple devices consumers are using.

Jobs

  • Editor
    Editor (Search Engine Watch) - New YorkRole Overview Search Engine Watch (SEW) provides tactical advice and information for businesses and site...