Social Network Ad Revenues Rising Worldwide

Social network advertising increasing share of online advertising

Thanks to Facebook, social networks are steadily increasing their share of total online ad spending in the US.

In 2011, 10.8% of all US online ad spending will go to social networks. Next year, the share of spending going toward social destinations is expected to rise to 12.1%.

“Major marketers are integrating social media into their overall marketing programs,” said Debra Aho Williamson, eMarketer principal analyst and author of the new report “Worldwide Social Network Ad Spending: 2011 Outlook.” “As they do so, advertising in social destinations is becoming a more logical part of their plan.”

On a worldwide basis, social networks are also increasing their representation. Of the nearly $69 billion marketers will spend on online advertising worldwide in 2011, 8.7% will land on social networks, rising to 10.2% of $79 billion in 2012.

By 2012, markets outside the US will account for more than half of social network ad spending. This shift will come as Facebook increases its global footprint and improves monetization in developing markets. Homegrown social networks in Russia, China and Japan—where Facebook has not yet penetrated—will also continue to see growth in usage and ad spending.

In addition, in some countries, such as Japan and China, mobile is the predominant way to access social networks. As mobile advertising becomes more sophisticated, eMarketer expects more ads to funnel into mobile versions of social networks.

“The skepticism of a few years ago has faded; large brands are allocating more marketing budget to social media than ever before, and their social network ad spending is also rising,” said Williamson. “Two categories of advertisers are emerging: major brand marketers that increase budgets gradually, and performance advertisers that spend heavily and bring extensive search marketing expertise.”

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