Social Network Ad Spending Jumps in '09 and Will Keep Rising

eMarketer expects social ad spending to become a greater priority in 2010, with the combination of social and mobile advertising turning up more opportunities for advertisers to reach their target markets – and for social media sites to fill more ad avails. The research firm forecasts social network ad spending to be greater than $1.21 when the books are closed on 2009, an increase of 3.9% year-over-year, with growth rates even higher in 2010. In fact, social networking ad spend could grow by 7.1% next year.

Since online ad spending dropped in 2009, the rise is social networking ad spending has set the stage for an increase in market share. Ad spend on these sites could account for up to 5.4% of all online advertising. Keep in mind that this is only for paid advertising, which is only a fraction of the total ad market (there are also ads under the cost-per-click and cost-per-acquisition model, in which many ads do not translate to payment, since there's no action).

Williamson says, "When companies budget for social media marketing in 2010 and beyond, a substantial portion of their expenses will go toward creating and maintaining a fan page, managing promotions or public relations outreach within a social network, and measuring the impact of a social network presence on brand health and sales."

The viability of social media advertising was reinforced during the holiday season, as many retailers turned to social media outlets such as Facebook and Twitter to bolster their efforts to reach potential shoppers. Best Buy Co., Inc. (BBY), Target Corporation (TGT) and Kohl's Corporation (KSS) were among those getting in on the action.

So, watch for the shift from traditional online advertising (who thought a decade ago that we'd see that expression?) to continue next year, as advertisers look for a better route into their customers' wallets.