The Crowded, Crowded World of Social Networks

MAY 14, 2007

Hello, hello, hello!

Since eMarketer published its first report on social network marketing, companies have latched with almost religious fervor onto the notion that consumers want to be socially connected online, whether on mass-appeal sites such as MySpace, on targeted niche sites and video sites, or on mobile phones — in fact, almost everywhere.

As a result, eMarketer has increased its estimate of US ad spending on social networks to $900 million in 2007, up from the previous estimate of $865 million.

Furthermore, between 2007 and 2011, US ad spending on social networks is expected to increase 180%, to $2.5 billion.

"The lead players, MySpace and Facebook, continue to perform strongly, and will account for 72% of all US revenues in the category this year," says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Social Network Marketing: Where to Next? "Beyond that, hundreds of new social networking ventures are coming online and existing Web sites are also adding social networking capabilities."

This burst of activity in the category brings up the question, "Where does social networking go next?"

The answer? "Everywhere," says Ms. Williamson.

Even outside of the US, social networking will ramp up significantly this year and into next year.

"eMarketer has raised its 2007 forecast for spending outside of the US to $335 million this year, up from $260 million previously," says Ms. Williamson. "In 2011, marketers will spend an estimated $1.1 billion on social network advertising outside the US."

Consumers continue to flock to social network sites. Based on market share of visits, MySpace ranked as the most popular site in the US in February 2007, according to Hitwise.