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Adspend estimates on social networks cut

Adspend estimates on social networks cut

Analysts have cut back estimates for global adspend on social networks adding to concerns that many social media sites do not make very much money.

EMarketer has cut its projections for adspend on social networks to £2.2bn in 2011, which is down by £200m on its estimate of £2.4bn.

However, the growth rate for worldwide social network ad spending still dwarfs that of worldwide online ad spending. This year it is estimated that social networks will earn around £1bn in ad revenues.

Online adspend is projected to grow 22% in 2008, compared to social network ad spending, which is expected to grow by 72%.

EMarketer said the current state of the economy, combined with the fact that social networks are still trying to develop successful ad models, led to it lowering its ad spending projections for the next few years.

Debra Aho Williamson, senior analyst specializing in social networking, said: "Social network sites are still trying to figure out what sort of advertising works.

"Tapping into consumers' conversations and spreading brand awareness virally has proven more challenging than companies originally thought."

The news comes as new figures are released that indicate most social media sites are continuing to expand their audience in the UK, according to Nielsen Online.

YouTube remains the star of the social media scene, being the most popular site for the seventh consecutive month with 11.6m UK unique users in April. This is up by 11% from January this year and up by 46% from a year ago.

Facebook is the second most popular in the UK with 10.2m unique users, which is up 277% from April 2007. Nielsen said the social networking site is now only the second social media brand behind YouTube to pass 10m unique users in a single month.

MySpace lost ground, dropping 31% from a year ago to 4.7m unique users and by 6% from January. MySpace is in fifth position behind Wikipedia in third and Blogger in fourth.

Bebo, which was acquired by AOL for an $850m (£434m) cash deal in March, is right behind MySpace in sixth position. Bebo grew 9% from January to April to 4.5m unique users. This figure is up 25% from April 2007.


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