Social networking sites grab big slice of Web ads

Reuters reports today:

About one of every five Internet display ads in the United States is viewed on a social networking Web site like MySpace and Facebook, according to a new report.

The report by analytics firm comScore underscores the increasing prominence of social media sites in the Internet landscape and broadening acceptance of the sites by brand advertisers.

It also illustrates the increasing competition between social media sites and established Internet companies like Yahoo Inc and Time Warner Inc’s AOL which have long billed themselves as the top online destinations for brand advertisers.

The study by comScore, released on Tuesday, said social media sites represented 21.1 percent of U.S. Internet display ads in July, with MySpace and Facebook accounting for more than 80 percent of those ads.

“Because the top social media sites can deliver high reach and frequency against target segments at a low cost, it appears that some advertisers are eager to use social networking sites as a new advertising delivery vehicle,” said Jeff Hackett, senior vice president of comScore.

According to comScore, AT&T Inc, Experian Interactive and IAC/Interactive Corp’s Ask Network were the top three advertisers on social networking sites in July.

While social media sites have enjoyed a surge in popularity in recent years — Facebook is now the world’s fourth-most visited Web site — some observers have questioned whether the sites can be effectively monetized.

Because the content on social media sites is created by users, and could therefore prove racy or offensive, some have questioned the willingness of marketers to place their brands alongside that content.

“They are sensitive to some extent, but nowhere near to the extent you might think,” Sanford Bernstein analyst Jeff Lindsay said of advertisers.

The price of placing ads on social networking sites is significantly less than on a Web portal like Yahoo or AOL, said Lindsay. The vast amount of Web pages available on social networks means that advertisers can purchase a massive volume of ad impressions at bargain prices.

The strategy may not be ideally suited to smaller marketers, or advertisers seeking a direct response from their ads, said Lindsay.

“For big, national brands it works just fine, just like TV,” said Lindsay. “It’s a huge, huge volume game.”

(Reporting by Alexei Oreskovic, editing by Matthew Lewis)

The original report (http://tinyurl.com/ny7bf2):

Social Networking Sites Account for More than 20 Percent of All U.S. Online Display Ad Impressions, According to comScore Ad Metrix

MySpace and Facebook Each Represent Nearly 10 Percent of Total U.S. Online Display Ads Delivered

RESTON, VA, September 1, 2009 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world today released a study of U.S. online display advertising on social networking sites in June 2009, based on data from the comScore Ad Metrix service. The study showed that social networking sites accounted for more than 20 percent of all display ads viewed online, with MySpace and Facebook combining to deliver more than 80 percent of ads among sites in the social networking category.

Top Online Display Ad Publishers in Social Networking Category
June 2009
Total U.S. – Home/Work/University Locations
Source: comScore Ad Metrix
Total Display Ad Impressions (MM) Share of Display Ads Ad Exposed Unique Visitors (000)
Total Internet : Total Audience 326,899 100.0 188,589
Social Networking 68,927 21.1 129,620
MySpace Sites 30,004 9.2 64,472
Facebook.com 26,813 8.2 67,389
Tagged.com 1,940 0.6 7,422
MocoSpace.com 496 0.2 1,067
Hi5.com 461 0.1 3,459
Bebo 435 0.1 6,350
Classmates.com Sites 400 0.1 9,181
BlackPlanet.com 345 0.1 2,084
GaiaOnline.com 258 0.1 1,859
DeviantArt.com 204 0.1 3,681

“Over the past few years, social networking has become one of the most popular online activities, accounting for a significant portion of the time Internet users spend online and the pages they consume,” said Jeff Hackett, comScore senior vice president. “Social networking sites now account for one out of every five ads people view online. Because the top social media sites can deliver high reach and frequency against target segments at a low cost, it appears that some advertisers are eager to use social networking sites as a new advertising delivery vehicle.”

AT&T Top Display Advertiser on Social Networking Sites in June

AT&T ranked as the top display advertiser on social networking sites in June with more than 2 billion ad impressions, which accounted for 30 percent of the company’s total number of display ads delivered during the month. Experian Interactive, which delivered a heavy rotation of ads for educational degree programs and credit scores, ranked second with nearly 1.3 billion impressions in the category. Two of the top ten advertisers on social networking sites in June delivered the vast majority of their impressions within the category. Pangea Media, which primarily advertises a variety of love and celebrity quizzes, delivered 90 percent of its ads on social networking sites, while online gaming provider Zynga delivered 97 percent of its ads on these sites.

Top Online Display Advertisers in Social Networking Category
June 2009
Total U.S. – Home/Work/University Locations
Source: comScore Ad Metrix
Total Display Ad Impressions (MM) Share of Advertiser Ad Impressions Ad Exposed Unique Visitors (000)
Social Networking Category 68,927 21.1 129,620
AT&T, Inc. 2,067 29.5 87,080
Experian Interactive 1,250 23.9 58,991
Ask Network 950 44.6 41,379
Sprint Nextel Corporation 790 26.3 68,581
Pangea Media 572 89.6 33,079
Microsoft Sites 564 16.8 60,148
Apollo Group, Inc. 510 41.4 51,981
Zynga.com 484 96.8 40,009
GameVance.com 450 33.9 34,762
Verizon Communications Corporation 435 10.5 54,010

“Social media is becoming an increasingly attractive vehicle for major advertisers seeking to optimize campaign reach and frequency and smaller advertisers desiring to reach a highly targeted audience,” added Hackett. “As social networking sites innovate on their existing ad offerings, the category should continue to grow in ad volume, while CPMs could also increase if the sites can demonstrate a high campaign ROI.”

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. For more information, please visit www.comscore.com/companyinfo.

Contact:
Andrew Lipsman
Director, Marketing Communications
comScore, Inc. 
+1 312 775 6510
press@comscore.com

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2 Responses to Social networking sites grab big slice of Web ads

  1. Excellent post, good looking blog, added it to my favorites!

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