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.