Social Networks In For a Big 2007?
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Remember when everyone still thought MySpace, Facebook and the whole social network scene was a nothing but a fad?
Marketers were reluctant to display their products over the new- fangled media and everyone kept waiting for the sites to fail.
They're still waiting, eMarkerter senior analyst Debra Williamson wrote in a report released today.
According to the report, advertising on social networks has become the top priority for online marketers.
The research firm is predicting that 2007 ad spending on US social networking sites will jump to $865 million from $350 million in 2006 a close to three-fold jump. By 2010, the report estimates, spending will reach $2.15 billion.
But Williamson said the growth could slide before then if social networks do not develop adequate measures of return on investment for their advertisers.
"The longer existing social networks take to develop adequate ROI metrics, the bigger the opening for a next generation of networks that are built from the ground up to accommodate advertising," Williamson said in the report.
The report said MySpace will lead the market and account for 60 percent of U.S. online social network ad spending in 2007, earning $525 million compared to $180 million in 2006.
The eMarketer report also contents that international expansion will play a key role in that growth.
Emarketer is not alone in its rosy view of social networking's money-making prospects. In September, RBC Capital markets analyst Jordan Rohan said MySpace might be worth $15 billion in three years.
It's numbers like those that helped spur Google to sign a $900 million deal with Fox Interactive to provide search and sell advertising for MySpace late last summer.