Feb 2007 Social Network Marketing

Industry Stats & Data by eMarketer

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Social Network Marketing, February 2007

Love them or hate them, social networks have become an indisputable part of the fabric of the Internet. Led by MySpace, which is now one of the most visited sites in the US, social networking is a cultural phenomenon that is still developing a stable revenue model. Social network ad spending is growing fast as advertisers become more comfortable with viral marketing and user-generated content. Search, e-commerce, video and international expansion will be key areas to watch in 2007.

For many marketers, advertising on social networks has now become a top priority. Google's $900 million deal with MySpace and a generally increased advertiser interest in other social network sites are among the key factors driving growth. eMarketer estimates that marketers spent $350 million on social network advertising in 2006. Spending is expected to rise 147% this year, to $865 million, and to $2.15 billion in 2010.

eMarketer predicts MySpace will continue to dominate, accounting for 60% of total US online social network ad spending in 2007. Networks including Facebook, Bebo and Piczo will make up the next largest chunk of revenues, followed by social networks offered by portal sites. Vertical or "niche" networks are estimated to generate $45 million in revenues in 2007.

In September 2006, MySpace delivered 15% of all ad impressions on the Web, according to Nielsen//NetRatings. More than 80 of the 100 leading national advertisers in the US have advertised there, according to Michael Barrett of Fox Interactive Media. In certain categories such as movies, TV and music, marketers are actively budgeting funds toward social networking campaigns. However, four industry categories accounted for 75% of MySpace image-based ad impressions in September: entertainment, retail, telecommunications and Web media. There are several categories that MySpace has yet to penetrate effectively: Consumer goods, travel, public services, software and health all accounted for less than 2% of ad impressions in September, according to Nielsen//NetRatings.

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