Facebook advertising appears to be a rising tide that lifts all social media boats. According to eMarketer, the ad spend on social networks is set to hit $1.7 billion this year. That's a 20% increase, and at least half of those ad dollars will be spent on Facebook.

According to eMarketer, social network ad spend is set to reach $1.7 billion this year. That means 6.7% of all US online ad spending will to go toward social networks.

At the end of last year, eMarketer estimated that social ad spend would top out at $1.3 billion. Facebook growth, as well as general growth in the sector, contributed to their projected increase.

Facebook is on track to receive half of all social media ad spending this year. Meanwhile, Twitter's newly launched ad service is accounted for in the predictions, but only accounts for a small percentage of ad spend for 2010. That could quickly change in 2011 if Twitter's bid for resonance catches on.

Considering that web surfers are increasingly spending time on social media sites, it's no surprise that advertisers are following along. According to Nielsen, social networking now occupies Americans’ 22% of people's time online. That's more than any other activity, and a 43% percent increase from last year.

eMarketer recently announced that Facebook would bring in $1.2 billion in global advertising this year, and the new estimates prove that all aspects of social networks are growing at a fast clip.

According to eMarketer:

"Advertising is not a primary revenue stream for game companies such as Zynga or Playdom, but their large audiences are drawing the interest of marketers. eMarketer expects such companies will attract $293 million in spending worldwide in 2011, up from $220 million in 2010."

The real issue for advertisers and marketers looking into social media advertising is that it receives much lower click-through rates and CPMs than other advertising online.

Facebook click-through rates are often lower than 0.05%, which contributes to a lower CPM. Facebook ads average 56 cents for every 1,000 impressions. The industry average is $2.43 online.

However, much of Facebook's ad growth can be attributed to its self-service ad platform, which is mostly used by small entities looking to reach specific demographics. As more large brands move their spend onto social media, we can expect that the rates sites like Facebook earn will increase along with their growth at scale. 

Meghan Keane

Published 17 August, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (2)


Rob Drummond

The demographic targeting that social media sites offer is quite staggering. I've found though that currently in my industry, not many of my customers and prospects use these sites enough to really see ROI.

Based on the trends above this clearly is likely to change, perhaps we will see a sort of tipping point for B2B markets and other industries not based on consumables.

almost 8 years ago


Mark P

Amazing stats, the growth that has been shown by social networks over the past few years is phenominal.

I wonder if we will hold Facebook in the same light as google in a few years time.

over 7 years ago

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