Facebook Dominates, Twitter on the Rise

2010 was the year that Facebook firmly established itself as a major force not only in social network advertising but in all of online advertising. This year, Facebook will be the primary reason social networks will account for 10.8% of US online ad spending.

US social network ad spending reached almost $2 billion in 2010. eMarketer estimates spending will rise substantially again this year, increasing 55% to reach nearly $3.1 billion. Growth over the next few years will be driven by Facebook and Twitter offsetting declines by Myspace.

Can anything stop Facebook?
The biggest issue that could impact Facebook’s ad revenue growth is the ongoing debate over online privacy. As one of the internet’s biggest storehouses of consumer data, Facebook is the focal point for many of the key issues surrounding consumer online privacy. And with the Federal Trade Commission calling for a do-not-track initiative, there is no sign that concern over Facebook’s ability to protect its users’ privacy is waning.

Growth in Twitter.
Twitter is enjoying its time in the limelight, as celebrities, late-night TV hosts and industry pundits have helped give the company prominence beyond its size. Early estimates are that marketers spent $45 million in 2010, Twitter’s first year selling advertising. By 2012, Twitter ad spending could reach $225 million, but that will be dependent on Twitter growing its user base substantially.

Twitter CEO Dick Costolo, speaking about the company’s corporate vision at an event during the CES trade show in January 2011, said,

Extending that to the ad business, Twitter’s vision must be to instantly connect marketers to the people most important to them— as well as connect people to the marketers that are most important to them.

Key to Twitter’s ad sales expansion is the launch of a self-serve platform, expected by mid-2011. The system will enable Twitter to penetrate not only the small/medium-sized business segment but also to tap into large companies that buy thousands of search keywords and optimize advertising on the fly.

So What Does This Mean?
Well, if you are a Publisher or a CMR you need to figure out how you can capitalize on this trend. After all, you have access to the businesses. Results from our Local Pulse survey, conducted on small businesses confirm the trends noted above. However, we also found out that the number one issue with social media for those who are using it is it is too time consuming to execute. Those that don’t use it state the number one reason is they view it as too complicated. Most small businesses don’t have enough time in the day for their normal activities. Put a service together to help them navigate through the social media landscape.

Social Network by the Numbers.

Jason Peaslee

Jason Peaslee is the Managing Partner of Thrive Analytics, a marketing research and analytics consulting firm. His career spans more than 20 years in marketing, advertising, product development, research, and business management. Before founding Thrive Analytics in 2010, he held several senior leadership roles at AT&T, Reynolds & Reynolds, Berry Network, & The Berry Company.

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