Projected Ad Spending on Social Networks Lowered to $1.2 Billion
Consumers are using social networking sites more than ever, but advertising spending in this medium has not kept pace.
Despite new social network ad formats launched in 2008, advertisers will spend $1.2 billion on social networks by the end of this year, down from the previous projection of $1.4 billion made in May, according to a new report from online marketing research firm eMarketer.
As for 2009, spending will reach an estimated $1.3 billion, down from a previous projection of $1.8 billion, eMarketer said. The recession and slower-than-expected revenue growth at MySpace are two of the reasons for the lowered forecast.
eMarketer also has revised its forecast for advertising spend on MySpace and Facebook. In its previous prediction, eMarketer said MySpace would bring in $755 million in U.S. ad spending in 2008. But that estimate has now dropped 22.5 percent to $585 million.
At Facebook, advertisers will spend approximately $210 million in 2008, which is 20.8 percent less than eMarketer's earlier forecast of $265 million.
Although the outlook for ad spending is challenging, eMarketer believes there are still many benefits to using social networks and that they remain viable marketing venues. What's more, eMarketer said that monitoring social network discussions about a brand or product and interacting with consumers in a community are still valuable and recommended activities.