“Social networks have cemented their place in advertising,” said eMarketer principal analyst Debra Aho Williamson. “More marketers than ever believe their brands should be engaging with consumers on social networks—and advertising is an increasingly successful tool for doing so.”
The bulk of these dollars, in the US and around the world, will go to Facebook, while a much smaller share will go to Twitter and other social networks. eMarketer’s first forecast of ad revenues for LinkedIn predicts the site will account for 3% of worldwide social network ad revenues this year. The site has more than tripled its ad dollars in two years, though growth is tapering off.
“Facebook will get nearly seven out of every 10 dollars spent on social network advertising worldwide in 2011,” said Williamson. “Twitter’s share will be around 3%.”
Social network advertising spending in the US will reach $2.74 billion this year, but more rapid growth elsewhere will mean spending outside the country will account for a slightly greater share each year, eMarketer estimates.
By 2013, non-US revenues will make up 51.9% of the total. In the US, social networks will make $4.81 billion from ads that year.
eMarketer had previously forecast in January 2011 that social network ad revenues worldwide would reach $5.97 billion in 2011, up 71.6% from $3.48 billion in 2010. This downward revision is mostly the result of eMarketer’s slightly lower estimate for worldwide ad revenues at Facebook—which comes as some advertisers are still cautious about Facebook’s low clickthrough rates and others feel they can successfully engage consumers without advertising on the site.
“As with eMarketer’s Facebook forecast, the revision should not be taken as a sign that social network advertising in general is losing momentum,” said Williamson.
Social network ad revenues worldwide are expected to grow 55.6% this year, eMarketer estimates, and 8.8% of online ad dollars in the US and 6.9% worldwide will go to social networking sites. By 2013, social network ad revenues will make up 11.7% of all online ad spending in the US and 9.4% around the world.
eMarketer forms its estimates of social network ad revenues based on a meta-analysis of estimates of consumer usage, marketer usage, ad pricing and impressions, as well as revenue estimates from research firms and other sources, and from interviews with industry executives.