Social Networking and Ad Revenue: Trending Down
February 9, 2012
Google Plus or Google+ (yikes, a name with a reserved character) is supposed to be the new Google. Well, Google depends on ad revenue. Some Googlers will insist that the 95 percent of the revenue is NOT from advertising, but I don’t believe them. Sorry.
Social networking accounts for one of every five minutes spent online, making it the most popular online activity worldwide. Media Post recently reported on the financial impact that social media is having on ad spending in the article “Social Networking Lags in Capturing Ad Spend.”
According to the article, a new report from comScore found that social networking sites lead all content categories in the number of display ads delivered, accounting for more than 1 in 4 U.S. display ad impressions. Despite this fact, it is not attracting ad dollars.
The article states:
The 17% of time spent online using social media is roughly comparable to the 15% share of display ad dollars. Furthermore, much of the marketing on Facebook comes in the form of earned or owned media via brand pages and apps, rather than through paid advertising. Much of the paid advertising on Facebook is small, low-cost ads from long-tail marketers rather than high-cost campaigns from big brands.
Facebook and Twitter are the leading social networking sites and they are becoming internationally popular and a phenomenon that is enjoyed by all age groups. If this report is correct, then the ad industry should strike while the iron is still hot. If social ad revenue does not hit the lofty targets required to keep billion dollar babies in diapers, trouble may arrive quickly.
Jasmine Ashton, February 9, 2012
Sponsored by Pandia.com