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Everybody Loves Social Networking, Except Some Advertisers


These days, wherever and whenever marketers gather, social networking is a hot topic. eMarketer estimates that marketers spent $2 billion to advertise on social network Websites worldwide in 2008.

And this year worldwide ad spending is projected to increase 17%, to $2.35 billion. Sounds great, doesn’t it?

A double-digit rise in spending is certainly good news at a time when forecasters are shrinking their worldwide online ad spending projections to the low single digits,” says Debra Aho Williamson, eMarketer senior analyst and author of the new report, Social Networking Worldwide: Ad Spending and Usage. “But the expected growth in social network spending in 2009 is half of what eMarketer had projected it would be in our previous forecast in December 2007.”

The slowing revenue growth does not necessarily spell doom and gloom for the social network business, however.

“In markets such as China, Japan, South Korea and Russia, some social networks have built growing revenue streams from selling virtual items to members,” says Ms. Williamson, “and from fees that members pay to play games or access premium content and services.” Another factor cannot be overlooked.

“Social network usage is growing substantially in many world regions, in several cases surpassing the usage levels seen in the US,” says Ms. Williamson.

Across nine countries studied by Nielsen Online, social networking and blogging accounted for 9% of all time spent online.

According to comScore Media Metrix, in Europe, 75% of Internet users ages 15 and older visited a social network site in December 2008, up from 61% one year earlier.

More than 210 million people in Europe visited a social network site during the month.Though there are many activities that people can engage in on social network sites—games, applications, listening to music—the key benefit is that they are an easy way to stay in touch and share information with friends and acquaintances.

“Socializing online is simply not going away,” says Ms. Williamson, “in any part of the world.” [eMarketer]

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