Major Report Predicts Ad Spend On Social Networks to Remain Modest In 2011
International accounting and consulting company Deloitte has predicted that advertising spend on social networks will remain modest in 2011 at less than 1%.
Analyst at Enders who was consulted for the Deloitte report, Ian Maude, explained that the gap between ad spend and time spent and on social networks was large, but this could be reduced as brand advertisers increasingly turn to social media.
He commented, "Our calculation is that spend on Facebook is around 10% of all UK display ad spend, but users' time spent there is around 20% of all time online... Facebook could help the migration of brand spend online - it certainly has more chance than any other online property."
The Deloitte report also stated that while total ad revenues made by social networks will reach £3.12bn next year, with the number of users predicted to reach more than 1 billion, revenue per user will be relatively small at just £2.50.
The report concluded that the revenues generated by social networks will be bolstered by new payment systems and ecommerce, but ad revenue will remain modest as a result of lower CPM rates than other media channels.