According to a new report from eMarketer, paid advertising on social networks in the US will drop 3% in 2009. In 2008, advertisers spent $1.175 billion on ads on social networks, but eMarketer predicts that this number will fall to $1.14 billion this year. The main culprit here is MySpace. EMarketer expects that ad spending on the social network will fall 15% in 2009. At the same time, it expects to see a 9% growth in ad spending on Facebook, and most other social networks are also doing just fine. EMarketer expects that this drop will be short-lived, however, and predicts a 13.2% increase in ad spending in 2010.
It’s important to stress that except for MySpace, most other social networks are still doing just fine, and advertisers have actually increased their ad spending on Facebook and other social networks. Also, while most advertisers only spend a relatively small amount of money on ads on widgets and applications, the amount of money companies spend on advertising on these platforms will actually increase from $40 million to $70 million.
As the Wall Street Journal points out, though, it is also important to note that eMarketer predicted a 10.2% growth in ad spending for 2009 in December 2008. For the upcoming years, eMarketer predicts that the market will rebound and it predicts a 13.2% increase in ad spending in 2010. However, given how far off eMarketer’s prediction for 2009 was, we will just take this projection with a grain of salt.
More Bad News for MySpace
Overall, this is obviously even more bad news for MySpace, which is already struggling to just keep its current user base from moving to other services. Even as the MySpace team tries to improve the service and streamline its business, it faces an extremely tough challenger in Facebook, which also has a lot of momentum behind it right now.