Social Networking Online Advertising – It’s Video but not Pre-rolls

This is a repost from an email that I received from Sam Levin.  Social Networking online advertising opportunity is not about Facebook or some social network.  To me it’s about video advertising.  Broadcast TV ads are moving to the web.  It will be video that cracks the high yield advertising value proposition, and it will be the biggest money maker. 

——- Social Networking is Hot

This year, 37% of the US adult Internet population used online social networking at least once a month. That figure will rise to 49% in 2011.

US Adult Online Social Network Users, 2006-2011 (millions and % of adult Internet users)

”The continued growth of social networking seems assured,” says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Social Network Marketing: Ad Spending and Usage, “unless teens stop social networking as they become adults.”

Don’t bet on that.

Currently, 70% of all US teens visit social network sites on a monthly basis.

US Teen Online Social Network Users, 2006-2011 (millions and % of teen Internet users)

“By 2011, one-half of all online adults and 84% of online teens in the US will use social networking each month,” says Ms. Williamson. “There is little to suggest that this activity will go away.”

When it comes to translating eyeballs into advertising revenues, eMarketer projects that worldwide online social network ad spending will grow from $1.2 billion in 2007 to $2.2 billion in 2008, 82%.

Worldwide Online Social Network Advertising Spending, 2006-2011 (millions and % change)

Worldwide spending will top $4 billion in 2011.

In the US, spending is projected to rise to $1.6 million in 2008, from $920 million in 2007.

”MySpace and Facebook together receive more than 70% of all US social network ad spending,” says Ms. Williamson. “And they are hard at work to convince marketers to allot more of their budgets to social network advertising.”

The advertising offerings of the two social network giants are becoming more diversified, and now include not only profile pages but search, display ads, widgets and more.

“But if social network marketing delivers on its promise of peer recommendations the flow of advertising dollars will turn into a flood,” says Ms. Williamson.

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

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