Social Machinery

Some days back eMarketer released their latest forecast for social networking ad spending. According to them, advertisers will spend $435 million on Facebook this year and $605 million on 2010. Even do these figures implies 39% increase, they are quite below the $1 billion in revenue for 2010  TBI Research’s forecast .

It also interesting to see that Myspace outlook for next year is quite pessimistic. First of all, advertisers will reduce their ad spending from $490 million this year to $385 million. Secondly, their growth outside U.S. market will be close to zero, staying at $25 million

The overall outlook, according to eMarketer looks very exciting. The ad spending forecast for social networking is $2.2 billion worldwide; 12% growth compared to 2009. Nevertheless, more than 60% of social networking ad spending will be concentrated in U.S. market. Therefore, still there is a confidence gap between the impact of social networking on consumer’s life (time spent, relevance, reach) and marketers’ willingness to spend on the channel.

In perspective $2.2 billion is a small figure compared to overall digital ad spending worldwide. Currently, ad spending forecasts for 2010 are in the range of $411 to $460. Online ad spending forecast is in the range of %12 to 16% of all ad spending.  Therefore,  social networking ad spending represent 5% to 10% of all online advertising budget.

Source: eMarketer blog