Advertising on social networks: Damp squib or huge growth market?

What’s the future of advertising on social networks? Brilliant, says Marketing (off the back a future-gazing report by eMarketer):

Adspend on social networking sites, such as Bebo and Facebook, is expected to rise 77% from £65m to £115m this year as the activity continues to grow in popularity in the UK.

In 2012, marketers are projected to spend £285m, a 148% increase over 2008, according to the research by eMarketer.

An estimated 11m or about 30% of UK internet users participated in online social networking last year.

Social networking adspend has moved at a slower pace than consumer adoption but with the growth of Facebook and the acquisition of Bebo by AOL, eMarketer said that things are picking up.

Actually, the prospects for advertising on social networks are rubbish, suggests the Guardian (off the back of the very same report by eMarketer).

Facebook, Bebo and MySpace may be booming in popularity, but new research shows that advertisers will spend just £115m on social networking websites in the UK this year.

The new report, by research company eMarketer. . . shows that revenue from websites such as Bebo, Friends Reunited and MySpace in the UK will grow to just £285m, or 5.5% of total online ad spend, by 2012.

Emarketer recently cut its projections for global ad spend on social networks to £2.2bn in 2011.

“The amounts are tiny. eMarketer believes that although growth [of users] is large, ad spend is a tiny percentage of overall online ad spend,” said Kris Oser, the director of strategic communications at eMarketer.

Pay your money. Take your choice. But never, ever, place any reliance on researchers’ forecasts of market growth.

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