Social ad spending will become a higher priority in 2010, with the combination of mobile and social advertising generating more opportunities for advertisers to reach their target markets for branding and engagement. eMarketer forecasts that 2009 ad spending on social networks will surpass $1.2 billion when all expenditures are tallied, a year-over-year increase of almost 4%. And social-media ad spending is anticipated to grow more than 7% next year:
According to Debra Aho Williamson, author of the report Social Network Ad Spending: 2010 Outlook:
As more marketers incorporate social networks in their business, they will no longer look at them as siloed destinations. Instead, they will look to increase the impact of their social network presence by linking it to other marketing initiatives, both online and offline.
So social network advertising is set to intersect with other kinds of advertising. Geotargeting, earned media (the additional unpaid exposure a brand receives when consumers talk about it online), social search, and social ad networks will be pivotal themes next year.
Facebook has become the preferred social network for marketers
Facebook is poised to surpass MySpace in advertising revenue. At 350 million users, Facebook is the premier destination for marketers in the U.S. and in many other countries. In 2010, marketers are expected to spend more than $600 million on Facebook (vs. $385 million for MySpace), accounting for nearly one-fourth of worldwide social-network ad spending — up from 20% in 2009:
Facebook Pages are increasingly becoming an integral part of brand advertising. They will become even more popular as Facebook introduces the Open Graph API, enabling branded social experiences to occur anywhere on the Web.
Williamson also says,
When companies budget for social media marketing in 2010 and beyond, a substantial portion of their expenses will go toward creating and maintaining a fan page, managing promotions or public relations outreach within a social network, and measuring the impact of a social network presence on brand health and sales.
The viability of social media advertising was reinforced during the holiday shopping season, as many retailers turned to social media destinations like Facebook and Twitter to bolster their efforts to reach potential shoppers. Kohl’s, Best Buy, and Target were among the companies that leveraged social networks for customer engagement. Online ad spending dropped overall in 2009, but the increase in buys on social networks has created opportunities for brands to increase their market share. Ad buys on these sites could account for up to 5.4% of all online advertising.
As advertisers search for new avenues to grab customers’ discretionary income, the shift away from traditional online advertising will continue to accelerate.
What’s your opinion? Do you think Facebook will surpass MySpace? How has MySpace been able to retain its revenue lead for so long? Please leave a comment!