Ads on Social Networks

Will Social Networks turn Commercial?
Social networks may be attracting millions of gullible youngsters, but most of them come either with empty pockets or they turn a blind eye to the online advertisements. This is evident from the fact that social networks get only a tiny sliver of the total interactive ad business.

Revising its projections downward for the U.S. market, researcher eMarketer estimates that advertisers will spend $1.4 billion to place ads on social networks this year, down from the previous projection of $1.6 billion.

Further, eMarketer believes that poor economy is partly responsible for the revised estimates, particularly for those companies who will cut experimental ad dollars first.

“Social network sites are still trying to figure out what sort of advertising works,” said Debra Aho Williamson, senior analyst, who authors the social networking reports. “Tapping into consumers’ conversations and spreading brand awareness virally has proven more challenging than companies originally thought.”

The research firm has revised its forecast for the two largest social networks, MySpace and Facebook. In its previous prediction, eMarketer had said MySpace would bring in $850 million in the US, but that estimate has now dropped 11.2% to $755 million. At Facebook, advertisers will spend $265 million, a 12.9% drop from the earlier forecast of $305 million.

The U.S. social network ad spending is expected to stay low and eMarketer estimates that it would reach $2.6 billion by 2012.

Now, My Techbox asks:
Can social networks attract advertisers’ eyeballs, too?

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