Social networking usage soars
More than one third of adult Internet users in the United States regularly use social networking sites, according to a recent report.
A study by eMarketer also found that 70% of online teens are now using websites like MySpace and Facebook every month; pushing advertising spend on social networking sites towards the $2 billion mark.
The popularity of social networking websites, which have been experiencing strong growth over the last few years, is predicted to increase for at least the next five years.
An upward trend
“The continued growth of social networking seems assured unless teens stop social networking as they become adults.” says Debra Aho Williamson, Senior Analyst for eMarketer and author of the ”Social Network Marketing: Ad Spending and Usage” report.
The report estimates that global spending on social media advertising will rise from $1.2 billion this year to $2.2 billion in 2008. It is predicted that worldwide spending will top $4 billion by 2011, when half of all online adults and 84% of online teens are set to be social networking every month.
According to Ms. Williamson the vast majority of advertising revenue will continue to be accounted for by only a few social networking sites. “MySpace and Facebook together receive more than 70% of all US social network ad spending,” she explains, “… and they’re hard at work to convince marketers to allot more of their budgets to social network advertising.”
“If social network marketing delivers on the promise of peer recommendations, however, this flow of advertising dollars will become a flood,” she adds.
The huge monetization potential of social networking’s big players has sparked fierce bidding wars among the world’s largest corporations. Microsoft recently invested $240 million in Facebook; a figure which valued the company at $15 billion, while in 2005 Rupert Murdoch’s News Corp secured market leading MySpace for a bargain $580 million.
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