Low CPMs Stall Social Network Ad Spend

Big impressions, not-so-big money

Time spent on social networking sites is increasing steadily, taking users’ attention away from sites such as portals. 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.

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.

an E-Marketer article found by Roger Stix at Atlanta Business Video