Social Network Ad Spending to Increase Slowly

According to recent figures released by eMarketer, worldwide online social network advertising spending is set to grow 9 percent in 2009.

In a report written by Debra Aho Williamson, senior analyst at eMarketer, the company expects worldwide ad spending on social networks to reach $2.18 billion in 2009, a modest 9 percent increase from 2008, when online social network ad spending was $1.20 billion, a 46 percent boost from 2007.

This figure is expected to reach $2.57 billion in 2010, an 18 percent year-over-year increase. In 2011, online social network ad spending will reach $2.89 billion, reflecting a 12 percent increase from 2010, according to eMarketer.

The 9 percent increase in 2009 is a noticeable downward revision from the 17 percent growth eMarketer expected in March.

“Changes in the US market are the primary reason for the forecast revision,” writes Williamson.

eMarketer expects online social network ad spending to decline 3 percent to $1.14 billion in the U.S. in 2009, “as marketers continue to cut back on ad spending during the recession and MySpace, once the leading social network in the US, loses traction.”

Facebook attracted 77 million unique visitors in June, according to comScore, while MySpace had 68.4 million visitors in the same month.

Meanwhile, non-U.S. social network ad spending is expected to grow 27 percent to $1.04 billion in 2009.

In 2010, social network ad spending will increase 13 percent to $1.29 billion in the U.S., while non-U.S. ad spending will increase 23 percent to $1.28 billion.

In 2011, social network ad spending will increase 8 percent to $1.40 billion in the U.S., while non-U.S. ad spending is expected to increase 17 percent to $1.49 billion, according to eMarketer.

MySpace is struggling to attract worldwide ad dollars as its audience shrinks. The social networking site is expected to take in $520 million in ad spending in 2009, a 14 percent decline from 2008.

Facebook, on the other hand, is expected to see its ad spending increase 20 percent to $300 million this year.

Facebook also has a higher percentage of its ad revenue come from non-U.S. sources (23.3 percent) compared to MySpace (4.8 percent).

Sources:</strong

http://www.emarketer.com/Article.aspx?R=1007176

http://www.techcrunch.com/2009/07/13/the-gap-grows-wider-myspace-eats-facebooks-dust-in-the-us/