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Spending for Ads on the Net Increases to $1.7 Billion


Social networking has been one of the primary mediums for advertisers today. Many companies spend the majority of their funds for marketing campaigns directed towards customers using their social networking accounts. Facebook, MySpace, and Twitter are just some of the major players where advertisers pour their money into.

This year, eMarketer estimates that the money being spent on web advertising this year will be around $1.7 billion. This number is projected to be the amount in spent in the United States alone. Worldwide, eMarketer estimates that $3.3 billion will be shelled out. The firm eMarketer helps companies make sense of data and numbers about the Internet by providing market research, statistics, and analysis on numbers on Internet marketing trends.

This is a huge surge from eMarketer’s estimates last year, when it projected ad spending through social networking sites to be about $1.3 billion only. This latest projections show the vast influence that social media already has in our consumption patterns. The projections also say a lot about the gradual economic recovery that the US is experiencing together with the huge traffic increase that social networking sites are experiencing.

The latest numbers in Internet ad spending is 20% higher than that of 2009. eMarketer expects these numbers to continuously go up through the year 2011. In the US, about 50% of the money being spent goes to social networking giant Facebook, which comes as a no surprise. The self-service ad system that Facebook uses enables its users to create, purchase, and target the small ad space that usually appear on the right side of its user’s pages. This advertising function accounts for at least half of Facebook’s revenue.

While Facebook continues its dominance in the industry, MySpace, on the other hand, is seeing its projected income from Internet ads dwindling down. Facebook is expected to earn around $1.3 billion while MySpace will draw only $297 million. This represents a decrease of around 14% for MySpace revenues.

In the same report, eMarketer projects that non-US spending on web advertising will eventually overtake that of the US by 2011. Online social games and apps also help a lot in driving ad expenditures up for social networking web sites.

Twitter, which had just recently opened up to the idea of advertising, has participated in eMarketer’s research for the first time this year with rather insignificant results. Twitter’s numbers are expected to increase as it gets on the advertising bandwagon.