Social networking advertising spending set to fall

Social media might be one of the hottest sectors of the online world, but it’s clear that the battle to monetise social networking is still raging.

A report from US research firm eMarketer predicts advertising spending on social networks will actually fall in 2009 by 3% to around $US1.14 billion, mainly due to problems at News Corporation-owned site MySpace.

The company recently cut 720 of its employees and has appointed a new CEO, former Facebook executive Owen Van Natta taking the chief executive role.

However, the dip in advertising spending on social networks is seen as temporary.

eMarkter is expecting total spending will increase 13.2% to $US1.29 billion in 2010, before climbing 8.2% to $US1.4 billion in 2011.

Debra Aho Williamson, eMarketer senior analyst, says the expected rebound in spending will come as more companies focus on creating and implementing an overall social marketing strategy.

“And it is a clear indication that the experimental phase of social network marketing is finally drawing to an end.”