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Ad Spend Up and Down, Depending on Where You Look


As usual, you can find statistics to support almost any argument. For example, if you want to use online ad spending as a measure of the economy, things are either looking up or looking down—take your pick. With search ad spend, the trend is up, but on social networks, the trend is down.

social media adsNow, don’t get me wrong here, social network ads are doing well—just last month, we were hearing that over 20% of online ads are shown on social networks, with MySpace having a slight edge over Facebook. Just a few weeks ago, Neilsen reported YOY ad spend growth on social networks—but the real figures may be more grim, says eMarketer. While the spend may be increasing, it’s still way too small for how many impressions they give. Social networks account for 3.5% of total Internet ad spending—a little disproportionate for a sector that’s displaying 22% of total Internet ads, don’t you think?

Although social network ads might outpace their respective ad spend by a factor of more than six, there is good news in online advertising—in search. Business Week reports that search has seen increasing ad spend for two consecutive quarters now:
US_spend_ROI
Source: eFrontier

Does this have anything to do with why at least one analyst says Google’s worth $100 more than its current price?

Well, I just have to say, it’s a darn good thing the government has already disbursed those $787B to needy PPC advertisers so we could get this economy turned around. (What’s that? Only 22% of the announced contract, grant, entitlement and loan funds have been paid out, and 49% of the funds haven’t even been assigned yet? Oh . . . so whose fault is this uptick?)

What do you think? Is search ad spending or social network ad spending a better sign of the economy’s next steps? Is Google really undervalued?