Posted January 2, 2008 1:10 pm by with 16 comments

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If you look at all the hype around social networking, you might think that it’s a fad that will soon fade. Advertisers don’t think so. After seeing how many teens and adults (40%) in the US are on social networking sites, they are upping their budgets for the new year.

Last year, advertisers spent $920 million advertising on social networks. They plan to spend a lot more this year – 69 percent more, according to eMarketer – around $1.6 billion. It’s not expected to slow either. In the next four years the figure is expected to reach $2.7 billion.

Advertisers are still trying to see what works on popular sites like Facebook, MySpace and niche online social networks. In a report titled: Social Network Marketing: Ad Spending and Usage, author Debra Aho Williamson, points out that:

“In 2007, 37 percent of the US adult internet population and 70 percent of teens used online social networking at least once a month.”

Teens in the US are heavy social network users. eMarketer predicts that by 2011 some 84 percent teens who are online will visit a social networking site at least monthly. That adds up to about 17.7 million teens.

eMarketer predicts that by 2011 more than 85 million adults in the US who are online will be on social networks. That’s almost half of all adults online (or 49 percent). That’s pretty optimistic. They predict that most of that growth will come in 2008.

If you look outside the US, the numbers are also growing – 75% in this year alone. Starting at $1.2 billion in 2007 this is expected to reach $2.1 billion in 2008. Globally, social-network ad spending is expected to more than double over the next few years to over $4 billion in 2011.

A Love/Hate Relationship
Why do advertisers love social networks? They can easily get a lot of information about not only individual preferences but also your peer groups. You can target ads: by location, keywords, and interests. Another reason – people return to a social network (to interact) often. That means more chances to get your attention.

Advertisers also struggle with how to best market on social networks. People often ignor ads because they are on the site interact not buy. They don’t welcome being marketed to. Or worse, people find the ads obtrusive. Another issue is that the information people give may not be accurate. Many people make up information on their profile to protect their privacy online (and 31% do, according to one report).

The whole challenge of marketing to networks is that it’s tough to reach people in this context. Once you exploit a network it loses its appeal. A network’s value comes from its authenticity and from trust. Advertisers not only need to be transparent, they need to add value to the community (entertainment, fun, relevancy). It won’t work based on models of exploitation or mass marketing.

I like what Seth Godin said today:

The truism of the web: people talking about you is far more effective than talking about yourself.

Here are some related posts on social network advertising:
Tips to Marketing on Facebook
Web 2.0 and Advertising: Do We See Eye to Eye? (be sure to watch the video with this post)
Nike+ a Lesson in Social Community Marketing

  • If I was an advertiser on Facebook or MySpace I would want to make sure that I would be able to target highly specific niches like people who like cats, and read magazines. And not take a shotgun approach like a lot of advertisers do. But then again I see why the 31% of people you quoted would make things up. Though personally I would rather see highly targeted ads towards my interests rather than for stuff I don’t want or need.

  • The social media should definitely not be neglected by any advertisers and, as far as targeting is concerned, let’s just say that there are a few products which are worth promoting to Facebook/MySpace users in general 🙂

    Alan Johnson

  • Personally, I plan on advertising on at least two social networks that we’ve ignored in the past. As you mentioned, Janet, the targeting is just too good to pass up. Obviously you want to have people talking about you but that certainly doesn’t mean that traditional advertising doesn’t work anymore.

  • Mike Calimbas

    lol. i LOVE the truism quoted in this article. It is absolutely correct.

    Isn’t all advertising on the web targeted nowadays anyhow? I found that out the obvious way when a friend of mine played a joke on me when I left my Myspace screen up at home. By changing my sexual orientation, he completely changed the ads that were coming up. Big ha ha from me…

  • Traffic is definitely not always targeted. Whenever there is any kind of incentive involved, traffic is no longer targeted. We have all sorts of traffic exchange programs out there as examples: people simply visit your website in order to gain “credits” and most will leave without even visiting another page. Even if your website has nothing to do with theirs and even if they are not interested in your website’s topic, they visit in order to earn the credits and leave.

    Alan Johnson

  • 🙂

  • Pingback: » Social Network Advertising: The Place To Be In 2008 Social Marketing Journal()

  • I think one of the most important issues that will need to be addressed as more and more companies use social networking sites as an advertising medium is that a balance is reached between effectively targeting users but not become so obtrusive that it is a turn-off to the user, thereby completely negating any potential benefits.

  • This was bound to happen. It’s too bad that most social bookmark site users bounce around and don’t convert very well. But, it’s their money.


  • Indeed, people who use social bookmarking websites are, in most cases, people who are quite accustomed to the Web. As a result, they are definitely ad-blind and have quite a short attention span. But that doesn’t mean that there aren’t more than a few products who convert well, even uder such circumstances 🙂

    Alan Johnson

  • The social networking sites were great fun for me initially. But eventually, it got so boring and repetitive. I have actually stopped using most of them and just occasionally log on to LinkedIn or Facebook. I think people will grow out of it eventually.

  • Nicole, I’m with you there but I also know that my wife and a few of her friends are on it frequently still and they are all a marketer’s dream in terms of receptiveness to ads. They’ve been active much longer than I was and keep finding new things they enjoy. I’m thinking it’s a personality or interest thing not necessarily something that all people will “grow out of”.

  • Social network users normally will ignore those ads, which is perhaps one of the reason why advertising on social network isn’t really a good idea

  • Advertising in social networks is not justified, as users of these networks do not like to click advertising.

  • Ariel


    I was targeted by someone doing exactly that on my personal Myspace. A woman contacted me saying that she “liked the same kind of music” it seemed so personal and sincere. She had a real page and everything…

    Told me about some kind of new radio program were I could some new station and I thought it was a small thing…

    Well, I got the same exact letter from my other Myspace account and felt so…Exploited…It was obtrusive and I let her know how I felt.
    It’s really annoying. I’m so sick of the ads that people have been sending me on my Myspace IM….I log on less now.

  • thanx for nica share