Social Networks – is 380% Growth a Good Thing?

Advertising

By Jason Kelley
July 8, 2011

Category:
Consumer Insights

As we continue looking at the optimal marketing mix for our clients, the new white paper from Borrell caught our eye.  Combined advertising and promotional spending will hit $38 billion by 2015, roughly 440% more than the $7 billion projected for 2010-a massive increase to say the least.

SocNet Promo Spending to Grow 380%
Breaking the combined social network marketing spending stream into advertising and promotional streams, “The Social Networking Explosion: Ad Revenue Outlook” projects that $5 billion of total $7 billion (about 71%) social network marketing spending in 2010 will consist of promotional expenditures.

From 2010 to 2015, social network promotional spending will grow about 380%. In 2011, it will grow 40% to $7 billion, and then slow down to about 14% growth in 2012, totaling $8 billion, However, social network promotional spending will then double to $16 billion in 2013, and continue rapid growth the next year, increasing 31% to $21 billion before slowing again with 12.5% growth to $24 billion in 2015.

SocNet Ad Spending to Grow 600%
Although the data shows social network advertising spending will remain at lower levels than promotional spending through the next five years, the total growth rate will be an even higher 600%.

In 2011, social network ad spending will grow 200%, from $2 billion to $6 billion, putting it on close to an even keel with promotional spending. Ad spending will remain close to promotional spending in 2012, rising almost 17% to $7 billion.

However, in 2013, ad spending will once again lag behind promotional spending, growing a very healthy 43% to $10 billion. Growth will then continue at a still impressive 20% pace to $12 billion in 2014 and 17% pace to $14 billion in 2015.

Consumers Fuel SocNet Marketing Spending Growth
Consumer analysis indicates the rapidly growing marketing spend in social networking is fueled by wildly climbing consumer use of social networking services. For example, comScore indicates Facebook alone had more than 100 million unique visitors in the US last December, out of 400 million registered users worldwide.

The average Facebook visitor came to the site 27 times during that month, almost once a day. As of the end of 2009, one hour in every nine spent online was spent on a social network site. More than two-thirds of the nation’s largest businesses recruit new employees through social networks, and 13% more plan to start this year.