Research firm eMarketer released new forecasts for social network ad spending this week. The figures are more conservative than the company’s May forecasts, with total ad spending in 2008 to reach $1.2 billion, projected to grow 10% to $1.3 billion next year. eMarketer attributes the lower-than-previous projections to the negative impact of the economic downturn on “experimental” forms of advertising.
More interesting than the overall numbers, in my opinion, is the projected market share among the various social networks they track in the report. This chart shows MySpace, Facebook and other destination social networks loosing market share to “widgets and applications.” I think they’re on to something here, and that this number can be far more significant over time as marketers find ways to use widgets to engage with social network users, versus simply advertising to them.
And, eMarketer reminds us of the importance of using social media to listen to customers: “monitoring social network discussions about a brand or product and interacting with consumers in a community are still valuable—and probably essential—activities.”