Jan 2008 Social Networking

Industry Stats & Data by eMarketer

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Social Networking is Here to Stay, January 2008

Social networking continues to grow. It is an activity that 37% of US adult Internet users and 70% of online teens engage in every month. By 2011, about half of all online adults and 84% of online teens in the United States will use social networks.

eMarketer projects that marketers will have spent $920 million on social network advertising in the US in 2007 and spending will rise to $2.7 billion in 2011, as marketers continue to experiment with the medium.

MySpace and Facebook still attract the most attention and money, winning more than 70% of all US social network ad spending in 2007. As social networking matures, the advertising methods are becoming more diversified, including not only profile pages but also search, targeted display ads and widgets.

MySpace remains the largest player, with an estimated $510 million in US spending in 2007 and $850 million in 2008. Facebook should generate $305 million in the US in 2008, up from $145 million in 2007.

When the two social network giants announced plans in November 2007 to deliver targeted advertising based on user profile and purchase information, they began to move social network marketing further toward fulfilling its commercial promise. The promise is that brand messages will spread virally among network members and therefore be more effective. However, as the recent backlash against Facebook’s Beacon program has shown, the road is filled with potholes. Peer recommendations continue to be the holy grail of advertising. Social networking sites are helping to deliver an effective platform for these recommendations.

Spending on other general social networking sites, such as those from Bebo, MSN, Yahoo! and Google, is expected to rise to $255 million in the US in 2008, from $190 million in 2007. Lastly, spending on niche sites and marketer-sponsored sites should reach $150 million in the US in 2007, from $75 million in 2007.

In 2007, US spending will account for 75% of total worldwide spending. As non-US markets mature, the US percentage of the total will drop to 65% by 2011.

Though the numbers are sizable and the growth significant, some perspective is necessary. Social networking still represents a fraction—4.3% in 2007—of total US online ad spending. Even in 2011, when spending is projected to be $2.7 billion, it will make up just 6.4% of all US online ad spending.

To find out more about eMarketer’s Social Network Marketing: Ad Spending and Usage Report, click here.

For more information, visit www.emarketer.com.