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Paid advertising on online social networks is expected to drop 3% in 2009, to $1.1 billion, but is expected to rebound next year and begin to emerge from the experimental phase, rising 13.2% – to $ 1.3 billion – in 2010 and going up from there, according to a recent forecast by eMarketer.

According to the firm’s new report, “Social Network Ad Spending: A Brighter Outlook Next Year,” ad spending on social networks is expected to hit $1.4 billion in 2011.

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eMarketer’s estimate is slightly more aggressive for next year than Forrester’s, which predicts that social media will account for $935 million in spending in 2010.

MySpace Faces Challenges

This year’s expected decline is the result of current recessionary conditions affecting most media, as well as continued difficulties at MySpace, which holds the top social network position in terms of ad spending but will shortly be overtaken by Facebook, said eMarketer.? Facebook? has? outperformed its rival in nearly every measure of usage, according to Debra Aho Willliamson, an eMarketer senior analyst.

Williamson also noted that 2009 is turning into a year of major shifts in the social network business.

US spending at MySpace is expected to fall 15% in 2009, to $495 million, while US spending at Facebook is projected to rise 9%, to $230 million. Consequently, MySpace’s share of US spending is projected to fall to 43.4% in 2009, while Facebook and other social network venues -? which are expected to grow and proliferate – will increase their share.

Facebook Makes Headway Outside US

While the US accounts for the majority of ad spending on MySpace and Facebook, non-US spending at Facebook has been growing quickly as well, eMarketer said.? The firm? estimates worldwide advertisers will spend a total of $520 million this year on MySpace, down 14% from 2008. In contast, worldwide spending on Facebook, is expected to grow 20%, to $300 million, in 2009.

“The expected rebound in spending will come as more companies focus on creating and implementing an overall social marketing strategy,” said Williamson. This, she added, is “a clear indication that the experimental phase of social network marketing is finally drawing to an end.”

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