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Wet Blanket Thrown on Social Marketing Ad Spend Predictions

Written on: May 14th 2008
Author: by Kathleen |
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ADOTAS – Don’t believe the hype: it seems social networking is more flash than cash in the interactive advertising spend department, according to eMarketer. The company revised its projections for spending in the U.S. this year down to $1.4 billion from $1.6 billion.

Once again, the sputtering economy is blamed for the revised estimates, particularly for companies planning to slash their “experimental ad” budgets first. The two big dogs of the social world – MySpace and Facebook — will be hit hard, eMarketer predicts. In its previous prediction, eMarketer said MySpace would bring in $850 million in the U.S., but that estimate has now dropped 11.2% to $755 million. At Facebook, advertisers will spend $265 million, a 12.9% drop from the earlier forecast of $305 million.

Still, the sector is still expected to grow this year – by 55%. eMarketer predicts that advertising spending will continue to grow steadily through 2012 – by 27% to 1.8 billion in 2009, by 15% to $2.1 billion in 2010, by 13% to 2.4 billion in 2011 and by 11% to $2.6 billion in 2012.

The analysts who revised their research acknowledged the problems advertisers are finding in getting a solid foothold in the market: “Tapping into consumers’ conversations and spreading brand awareness virally has proven more challenging than companies originally thought,” Debra Aho Williamson, senior analyst, and author of the report, said in a release.

Reader Comments.

Kathleen,
Interesting article, and well written I might add, that demonstrates the complexity of developing an ROI model for the Social Media environment.

Aren’t Social Media networks an attempt to escape the marketing messages that invade nearly every aspect of our lives which leads to the difficulty in producing effective results and hence the cut backs in ad spend?