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.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

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

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Sr. Paid Search Manager
      Sr. Paid Search Manager (Bisk Education) - TampaCurrently seeking a Sr. Paid Search Manager in Tampa, FL for Bisk Education! Bisk Education is a...
    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...