BUSINESS BLOGS
BUSINESS BLOGS
category: business
14 Dec 2007

The rule is: build an audience, and they will come. They, of course, being marketers. Apparently, there seems to be an exception to that rule, and that is social networking.

Some facts according to eMarketer, then the fiction, then the reality.

Facts:

- 70% of all US teens visit social network sites on a monthly basis.
- 37% of the US adult Internet population used online social networking at least once a month. That figure will rise to 49% in 2011.
- By 2011, one-half of all online adults and 84% of online teens in the US will use social networking each month.

These are staggering numbers… you would think that a proportional share of online ad dollars would follow to such sites, right? Wrong. That’s the fiction, and that is the myth that has been propped by so many of the me-too, web 2.0 social media wanna-be projects trying to pass off as businesses.

The reality is that despite all of this, eMarketer projects that worldwide online social network ad spending will grow from $1.2 billion in 2007 to $2.2 billion in 2008, 82%. Worldwide spending will top $4 billion in 2011. In the US, spending is projected to rise to $1.6 million in 2008, from $920 million in 2007.

These are indeed large numbers, but compared to the massive online advertising pie, they are quite quaint.

Let’s compare, first the figures for Worldwide Social Networking Advertising Revenue:

Compared to US Online Advertising Revenues:

Let’s project that US advertising is about 50% of global ads, that would imply that worldwide total advertising will grow to:

2008: $50B
2009: $60B
2010: $75B
2011: $80B

Breaking down the worldwide contribution from social networking, this implies that social networking will yield:

2008: 5%
2009: 6%
2010: 7%
2011: 8%

When you consider all of the VC activity in social media and what not, that does seem to suggest much ado about nothing.

How does WatchMojo.com address it? Building the most valuable apps on the social networks.