http://www.technologyreview.com/Biztech/20978/page2/
Looks like the data came from eMarketer - but it is definitely an interesting view of that same data.
Tuesday, June 24, 2008
US Social Network Ad Spending
I just came across an interesting graphic from the MIT Technology review and wanted to post it here. Users and Advertising revenues in the US. Full credit given as usual:
http://www.technologyreview.com/Biztech/20978/page2/
Looks like the data came from eMarketer - but it is definitely an interesting view of that same data.
http://www.technologyreview.com/Biztech/20978/page2/
Looks like the data came from eMarketer - but it is definitely an interesting view of that same data.
Monday, June 23, 2008
facebook passes myspace in unique users, but what about advertising revenues?
Over the past couple of weeks, there has been a lot of talk about facebook passing myspace in terms of unique users. Comscore reported that facebook had 123.9 million unique visitors, while myspace had 114.6 million in the month of May. This was foreseeable for some time as facebook created a social networking site with superior functionality and ease-of-use. Throw in custom application development, an exciting friend news-feed, and international expansion, it was a recipe for success.
The important question for me would be, 'Does this now mean that more advertising dollars will flow into facebook?' The answer for now is a simple NO. Reason being - THE U.S.A.
The US has the highest penetration rate of any country in terms of Internet usage at 71%, and the US has by far the most mature Internet market (Consumers comfortable buying goods online, Advertisers confident in a positive ROI on their investment). This means that the majority of online ad spending is by US companies, targeting US consumers. myspace has a majority of it's audience in the US, hence the advertising dollars flow in their direction as opposed to facebook.
However, facebook should not be scared. Although I try my best not to stray off topic in this blog, some brief research into the world economy indicates that economic strength is shifting from the US to other countries, and facebook is well positioned to take advantage of International growth. In fact, facebook has recently expanded into China. China is expected to PASS THE US in terms of total internet users this year. (China is currently at ~210 Million while the US is at ~215 Million). Although it may take some time for the non US Internet market to mature , it seems that soon facebook will be passing myspace in terms of a more important statistic - Ad revenues!
The important question for me would be, 'Does this now mean that more advertising dollars will flow into facebook?' The answer for now is a simple NO. Reason being - THE U.S.A.
The US has the highest penetration rate of any country in terms of Internet usage at 71%, and the US has by far the most mature Internet market (Consumers comfortable buying goods online, Advertisers confident in a positive ROI on their investment). This means that the majority of online ad spending is by US companies, targeting US consumers. myspace has a majority of it's audience in the US, hence the advertising dollars flow in their direction as opposed to facebook.
However, facebook should not be scared. Although I try my best not to stray off topic in this blog, some brief research into the world economy indicates that economic strength is shifting from the US to other countries, and facebook is well positioned to take advantage of International growth. In fact, facebook has recently expanded into China. China is expected to PASS THE US in terms of total internet users this year. (China is currently at ~210 Million while the US is at ~215 Million). Although it may take some time for the non US Internet market to mature , it seems that soon facebook will be passing myspace in terms of a more important statistic - Ad revenues!
Wednesday, June 4, 2008
In Response to 'Exec: Ad industry must think small to tap social sites'
In keeping with the trend in my previous blog posts, I have decided to comment on recent industry news - this time a post by CNET writer, Caroline McCarthy. She posted an article titled: Exec: Ad industry must think small to tap social sites
The purpose was to summarize the keynote speech by Seth Goldstein, co-founder and CEO of SocialMedia Networks. Seth made an interesting comment about click-through rates on social networking sites tanking. Now, there is no doubt that the CTR is dropping for standard ad placements on facebook (left-hand column) and myspace (top-right box), however, having dug deep into the numbers at adparlor.com I can tell you that the CTR remains high on custom applications for reasons I mentioned in my previous post.
I agree with most of the statements Seth made. For one, applications like super poke and food fight are "not important because the content is serious; they're not important because they're high-utility; they're important because people are spending an ungodly amount of time using them." Although an advertiser may question how effective their ad will be on a food fight application, the reality remains that this is where the users are - and as these users are highly engaged with the application and everything on the screen, ads displayed on these applications will get a high click-through rate and will see meaningful results.
The beauty of these application is the ability to grow phenomenally fast. When launching, for example, a new poker site, it would take a large marketing budget and a significant amount of time to grow your user base. However, on myspace 'Texas Holdem Poker' has acquired over 350,000 users in just a couple of months. Application developers can quickly own a valuable property on the internet, and if monetized correctly, they can be earning over a $1 CPM rate. That application then becomes a mutually beneficial property for both the developer and advertisers trying to tap into the social networking market.
The purpose was to summarize the keynote speech by Seth Goldstein, co-founder and CEO of SocialMedia Networks. Seth made an interesting comment about click-through rates on social networking sites tanking. Now, there is no doubt that the CTR is dropping for standard ad placements on facebook (left-hand column) and myspace (top-right box), however, having dug deep into the numbers at adparlor.com I can tell you that the CTR remains high on custom applications for reasons I mentioned in my previous post.
I agree with most of the statements Seth made. For one, applications like super poke and food fight are "not important because the content is serious; they're not important because they're high-utility; they're important because people are spending an ungodly amount of time using them." Although an advertiser may question how effective their ad will be on a food fight application, the reality remains that this is where the users are - and as these users are highly engaged with the application and everything on the screen, ads displayed on these applications will get a high click-through rate and will see meaningful results.
The beauty of these application is the ability to grow phenomenally fast. When launching, for example, a new poker site, it would take a large marketing budget and a significant amount of time to grow your user base. However, on myspace 'Texas Holdem Poker' has acquired over 350,000 users in just a couple of months. Application developers can quickly own a valuable property on the internet, and if monetized correctly, they can be earning over a $1 CPM rate. That application then becomes a mutually beneficial property for both the developer and advertisers trying to tap into the social networking market.
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