For the first time, advertising within social networks is expected to reach $5 billion this year, eMarketer estimates. By 2013, it could be a $10 billion business.
That’s solid growth, but it’s still a tiny percentage of the overall online ad market. This year, eMarketer expects U.S. social network advertising to reach less than 9% of total online ad spending. That’s hardly much, considering how much time people spend on Facebook.
Here’s another chart from super-analyst Mary Meeker, who is currently at VC firm Kleiner Perkins. As she notes, social media advertising is already the biggest category of ad impressions… And social networking ad rates aren’t as laughable as you might think. (But are still well behind verticals like news and sports.)
The takeaway: Social network traffic and time-spent metrics are certainly in their favour. But social networks aren’t nearly as revenue efficient as other web products.