Pronet Advertising

Social Network Ad Spending and Return on Investment

eMarketer published a press release a few days ago highlighting the growth in spending on advertising on social networking sites, a possible reaffirmation of the results from Fox Interactive Media's study on social networks and marketing.

We previously highlighted the results from the study which indicated that over 70% of Americans between 15-34 are actively using social networks and that a lot of this activity occurs during 'prime-time hours', allowing companies to make 'meaningful brand connections' with the users. Furthermore, the study showed that social-network-based advertisements offered a return on investment which was higher than that from other online advertising campaigns and even televised ad campaigns.

The eMarketer study points out that the company has increased the estimate of US ad spending on social networking sites to $900 million in 2007 and that ad spending is on track to grow 180% between 2007 and 2011 to $2.5 billion. The increase is a result of "increased revenue projections for Facebook and additional spending on niche and marketer-sponsored social networks."

While the general trend is positive, not all sites in the social networking niche are benefiting from this. MySpace and Facebook are the two main players and are dominating the field by a large margin. With an estimated $525 million, MySpace accounts for 58.33% and with $125 million, Facebook accounts for almost 14% of the total marketing expenditures. If you consider that the remaining 26.67% or $250 million is being divided between all the other social networking sites (including Google's Orkut, Yahoo's 360, Microsoft's Spaces and so forth) the disproportionate amount of money being spent on the former two sites becomes more interesting.

This research coupled with Fox Interactive Media's earlier research shows that not only is the return on investment for social-network-based marketing campaigns better than the alternatives but that more and more marketers are making the leap of faith and opting for this non-traditional strategy.

Think Search Engines //, May 14, 2007

“Social Networks Ad Spending” — eMarketer.com published US Online Social Network Advertising Spending. It projects in 2011 to be $2.5 billion in US alone and additional $1+ billion outside of the US. Muhammad Saleem of Pronet Advertising offers his analysis of the ad spend distribu...

Dollars & Sense from GoPowWow!, May 14, 2007

“Where people go, products soon follow!” — Apparently there will be $2.5 billion spent on advertising on social networks by 2011 as discussed by Kristen Nicole at Mashable.com and Muhammad Saleen at Pronet Advertising. ?Ǭ†This only makes sense as sites like GoPowWow! attract people trying to fin...