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October 15, 2009

Online Advertising Spends Across Categories

Call it Recession or just an increasing realisation about the internet as a medium of increasing influence,the online industry ad spends shows how advertisers are increasingly investing in categories where the online audience seem to be converging.

Consumer activity on social networking and blogging sites accounted for 17 percent of all time on the Internet in August 2009, up from 6 percent a year ago, Nielsen estimates. At the same time, it believes ad spending on social networking and blogging sites grew 119 percent, from an estimated $49 million in August 2008 to $108 million last month. Expressed as a percentage of total U.S. online ad spend, ad expenditures on social networking sites climbed from 7 percent in August 2008 to 15 percent last month.

According to Nielsen, while several industries decreased their overall online ad spend year-over-year in August — including travel, business-to-business, automotive, software, financial services, and telecommunications — spending on the top social network sites increased across the board.

The entertainment industry led in growing its online ad dollars, increasing ad spending on social networking sites by 812 percent. Travel advertisers increased their ad spend on those sites by 364 percent

.According to comScore, the top 20% of social network users visit networking sites 2.4 times per day, on average, and spend 31 minutes on them—twice as long as the same users spend with e-mail or instant messaging. And that, in turn, means more time with ads.

The research firm’s “The State of Social Networks as a Media Platform” report found that more than one-fifth of online display ad impressions occurred on social networking sites in July 2009. That was more than double the display ads viewed on e-mail and entertainment sites.

According to emarketer,The bulk of those ads were viewed on MySpace and Facebook, with MySpace accounting for somewhat more impressions, but a slightly smaller share of total display ad spending than Facebook.

Despite social networks’ large share of ad impressions, just 3.5% of the total US display ad spend went to social networking sites, according to comScore. The research firm attributes that small share to the low CPMs social network display ads get.

Nielsen reported that August 2009 display spending on social networking sites had more than doubled year over year. Dollars are following eyeballs, but depressed prices may keep social network ad spending low relative to display inventory.