A couple years ago there was widespread ambivalence concerning the real potential that online video held for financial viability. There still seems to be a certain sense of uncertainty there, and it might be argued that online social networks are encountering similar doubts, though on a smaller scale. Can social networks offer advertisers a legitimate and worthwhile outlet to reach its consumers?
A recent eMarketer report shows that advertisers are probably willing to lay down some serious dollars to find out.
In 2007, 56.9 million U.S. adults were online social network users, which is about 37.0% of all adult Internet users. By 2011, 85.1 million U.S. adults are expected to be social network users, which would be about 49.0% of all adult Web users.
As for U.S. teens, 2007 saw 13.6 million teenagers with social network accounts, or 70.0% of all teen Web users. By 2011, this figure is expected to reach 17.7 million U.S. teens, or 84.0% of all teenage Internet users.
These gaudy numbers are expected to be matched with equal enthusiasm by advertisers. In 2007, worldwide ad spending for online social networks was $1.2 billion, a 155% increase from last year’s $480 million figure. This spending is expected to grow to a whopping $4.1 billion by 2011.
Currently, 70% of all U.S. online social network ad spending goes to MySpace and Facebook, the two top dogs in the realm.
So long as social networks fulfill the promise it holds for advertisers hoping to see their products and services spread in popularity through these sites, there appears to be no reason why these lofty expectations cannot be realized, or even exceeded.
The growth of more professionally-focused social networks such as LinkedIn should also provide a spark of interest for advertisers looking to target more stable, mature audiences. MySpace and Facebook will have to adjust to accommodate for this trend as well, in order to ensure that it captures younger users and keeps them as they grow older and enter their working lives.
Sources:
http://www.emarketer.com/Article.aspx?id=1005688
http://www.redherring.com/Home/23315
Jason Hahn
e: jhahn221@gmail.com
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