Nov 2007 Social Network Marketing

Industry Stats & Data by eMarketer

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Social Network Marketing, November 2007

eMarketer's revenue projection for Facebook earlier in the year seems to be accurate (see article, Social Network Ad Spending Keeps Rising, Aug. 13, 2007). Facebook is now valued at $15 billion after Microsoft bought a 1.6% stake for $240 million, and a lot that seems to be related, not only to Facebook's large audience, but also the promise it holds for advertisers. The Facebook-Microsoft partnership will draw even more attention to the cultural phenomenon called social networking. MySpace and Facebook, both among the most visited sites in the U.S., can expect to see a surge in ad spending as marketers begin to harness the advertising power of viral and user-generated content.

eMarketer estimates that advertisers will spend $900 million on social networking sites in 2007, increasing to $2.5 billion in 2011. Marketers hope that brand messages will spread virally from friend to friend, providing an exponential effect on these platforms.

eMarketer predicts that MySpace will continue to dominate social network advertising revenues with $525 million in 2007, moving up to $820 million in 2008, a 65% increase. Facebook's ad revenue is expected to grow faster than that of MySpace with a 72% increase from $125 million in 2007 to $215 million next year.

MySpace captures the largest share of advertising revenues at 58%. Facebook's share is 14%. Other social networks, including niche social networks devoted to a specific hobby or interest, and market-sponsored social networks account for the remainder of the pie with 28%.

The key issue of the next 12 months will be proving that social network marketing works, according to Debra Aho Williamson, eMarketer senior analyst, who authors reports on the topic. Marketers want evidence of return on investment. "eMarketer's projection that worldwide social network ad spending will triple from $1.2 billion this year to $3.6 billion in 2011 is predicated on the idea that the proof will come and that marketers will see solid ROI from delivering a brand message to one person and having that person pass along the message to friends," Ms. Williamson said.

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

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