While many of us "over 30 somethings" are still learning about this whole online phenomenon called "social networking," Red Herring now reports that by 2011, one half of all online adults and 84% of all online teens will use social networking on a monthly basis. It's here and it's not going away anytime soon. In fact, Facebook, a website many adults still view as a play toy for students, was recently tagged with an enterprise value of an astounding $15 billion.
Worldwide, online social networking advertising expenditures are expected to reach $1.6 billion and push past the $4 billion threshold by 2011. The two biggest current players in this arena (70% of the combined market) are Facebook and Myspace, whose joint successes have been fueled by web-savvy teens and college students. But with such high stakes for future advertising revenues, other players are emerging. Many of us now receive regular invitations from colleagues far and wide to join their LinkedIn network--a service clearly differentiated to appeal more to working professionals.
Over the next five years, look for the proven major players to get bigger. But with the volume of dollars being projected here, we should also see enough industry size to encourage a number of smaller niche companies to make their plays for a piece of the advertising pie as well. And as new players enter, we should see a variety of new site-specific consumer applications (e.g., profile pages, trivia games, hobby sharing), some of which will undoubtedly come embedded with still more mechanisms for pushing advertisements to users. As these are subsequently copied by other competitors and the Facebook crowd grows into the LinkedIn crowd, the potential advertising dollars on the table are mind-boggling.
If you're an advertiser, you can expect your life to get a lot more complicated over the next decade. If you're a marketing professor, boredom isn't in your forecast either.