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Social network ad spending projected to contract this year

By Published on .

New York—Total U.S. advertising expenditures on social networks are expected to fall 3% to $1.14 billion this year, down from the $1.18 billion spent in 2008, according to Internet market research company eMarketer.

The company said its latest forecast is largely based on its revised expectations of ad spending on MySpace, which eMarketer had projected would rise about 8% to $630 million this year. However, eMarketer now projects ad expenditures on MySpace—last year’s social ad leader with a 50% market share—will fall 15% below 2008 levels, as Facebook, other social sites and widgets gain share.

The overall contraction in social network advertising is a turnaround from previous years. Ad expenditures on social networks grew an estimated 33% in 2008 and 129% in 2007.

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