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Facebook’s Success Drives Social Ad Spend Forecast Up

Facebook is the market maker for social media ad spend. Maybe that’s why there is so much rumbling from Google about getting into the social media game for real because, after all, online advertising is Google’s game, right?

eMarketer reports that they have increased their projections for social media ad spend for 2010 an it is mainly Facebook’s success that is causing this reassessment.

eMarketer estimates US advertisers will spend $1.68 billion on social networking sites this year, a more than 20% increase over 2009. Spending will rise even further by 2011 to more than $2 billion.

In December 2009, eMarketer forecast $1.3 billion in social network ad spending for 2010. Strong performance from online ad spending in general, and Facebook in particular, has resulted in the increased forecast.

Funny how ‘real’ numbers can impact forecasts, huh? At this rate cracking the $2 billion level in 2011 should need to be updated as well but for now it looks like eMarketer is playing it safe.

This growth is something that is occurring worldwide as well which makes it all the more interesting for advertisers. The US should account for just over half of that spend in 2010 but in 2011 it will slip below the 50% of spend mark due to increased popularity of the advertising opportunities around the globe.

With the market shaping up the way it appears for now it will be very interesting to keep an eye on Google’s plans for the social space. Many have speculated that because of their recent abandoning of Google Wave and the non-impact of Google Buzz that the Goog won’t be able to pull this off.

Personally, I think that their two relative ‘failures’ have moved them closer to figuring out just what might give Facebook a run for its money. Of course, if Google lays a social media egg with anything in the future they are going to start to look a lot like a corporate ‘dinosaur’ in the land of the young, quick and nimble. It has happened to the best in the past (remember the invincible Big Blue of IBM?) so Google better pay heed to history.

Your thoughts?

  • Ann Williams

    I agree. “Google better pay heed to history.” Because they’re huge, they can buy everything they want to, add to their already burgeoning facilities… but … are they losing their creative entrepreneurial edge? It sure looks like it.

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    Nice post.eMarketer has predicted a 39% increase in advertising spend on Facebook for 2010. The popularity of advertising on social networks is primarily based on the notion that sites like Facebook have a great deal of data on their users and this information can be exploited to deliver highly targeted ads to its huge user base. In theory, it makes a great deal of sense. Afterall, users are going crazy and sharing every little detail of their personal lives on these sites so why not leverage that information for marketing to them? In fact, Facebook goes on to claim that businesses should advertise on the site because:People treat Facebook as an authentic part of their lives, so you can be sure you are connecting with real people with real interest in your products.Thanks for share the information.

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