6.7% of all US online ad spending to go toward social networks this year

Hitwise, the web analytics firm, has a report out today that claims that social networks now receive more UK Internet visits than search engines.

Which, if the case, would imply that Google should be considerably worried about its future battle with the likes of Facebook and Twitter, as online marketing spend will surely follow Internet foot-through. Or does it? According to Hitwise, during May, social networks accounted for 11.88% of UK Internet visits and search engines accounted for 11.33%, representing the first ever month that social networks have been more popular than search engines in the UK. At this point, it’s worth noting that Google-owned YouTube is lumped into the social networks group – is YouTube really a social network? – so that in itself significantly skews the results. But, nonetheless, social, and in particular Facebook and Twitter, continue in its ascendancy.

Facebook now accounts for 55% of all UK social networking visits, almost three times as many as the next most popular social network, which Hitwise pegs as YouTube. Twitter, on the other hand, is now the third most popular social network in the UK, putting it ahead of Bebo (no surprise) and MySpace, which seems pretty significant considering how popular the Murdoch-owned property once was with Brits.

Robin Goad, Research Director for Hitwise, comments: “although social networks and search engines perform different functions, they both act as gateways to the wider Internet. This data perfectly illustrates the key role that social media now plays in so much online behavior.” But the money isn’t yet following, with Goad noting that “the majority of online marketing spend is currently diverted towards search, and this is likely to remain the case in the short to medium term.” Search remains the “primary source of traffic for most websites”, particularly e-commerce, such as online retail, finance and travel. “Many marketers and brand owners have yet to grasp the full potential of social media marketing, but spending on the channel will increase as more proven success stories emerge.” Success stories, you say.

But can social media marketing really overcome the issue of intent? Too often, ads on YouTube and Facebook work like traditional advertising, forcing themselves onto people and interrupting the conversation or getting in the way of the content. Not only is it an issue of obtrusiveness but that advertising is out of kilter with the user’s self interest. However, when a user searches on Google, there is an intended action at the end of it, which is very often making a purchase or researching one. In which case, the interests of the user and advertiser are perfectly aligned.

Nobody is interrupting anyone. Regardless of today’s report, it’s only once somebody really figures out how to tap into intent on Facebook that Google should be worried.

Very worried.

Its use is exploding, but ad spending in the sector continues to be a blip on the radar for most brands

Social media use is exploding, but ad spending in the sector continues to be a blip on the radar for most brands.
 
Razorfish, one of the largest digital ad spenders, compiled data on its 2009 digital ad spending. It found that social media display advertising made up just 3 percent of its clients' budgets. Non-display in social media accounted for another 1 percent. The figures pale in comparison to the time spent online. According to comScore, U.S. Internet users spent 11 percent of their time online in 2011 on social media sites.
 
The spending figures reflect that, all the chatter about Facebook, Twitter and iPhone notwithstanding, online media is dominated by traditional vehicles: vertical sites, ad networks, portals and search accounted for 88 percent of buys. Vertical sites got the biggest share of spending, 31 percent. Search was next with a 25 percent share and ad networks received 20 percent. Other emerging media remain blips: mobile accounted for just 2 percent of Razorfish's spending.
 
Like other agencies, Razorfish has found social media is less of an ad medium and more of a platform for building communities. The spending doesn't take the form of ad buys but rather the labor to build a Facebook page and staff it to respond to consumers, said Jeremy Lockhorn, vp of emerging media at Razorfish.
 
"A lot of the display media in social media is very cheap," he said. "More importantly, a lot of the money going into social is people powered, like blogger outreach. You don't see that in the media spend."
 
More money will flow into social in 2010, but Lockhorn believes it will continue to be in the earned media space rather than paid.
 
Overall, Razorfish saw signs of an online ad recovery. After dipping by 13 percent in 2008, ad spending for clients rebounded to increase by 4 percent in 2009. Razorfish expects growth to pick up in 2010. The average CPM paid was between $7 and $8. The median was $5. Razorfish said it expects CPM prices to rise in 2010.
 
Search occupied less of the spending pie at Razorfish. In 2008, the agency spent 37 percent of client budgets there, but in 2009 that dropped to 25 percent. The shop attributed that to normally high-spending clients in financial services and health pulling back budgets. Plus, at one point last year, pharmaceutical firms took down their ads after the FDA sent out warning letters. The losses in those sectors weren't offset by travel and retail, where spending was flat.

Portals fell out of favor, with spending dropping from 16 percent to 12 percent overall. Ad networks continued to hold strong, increasing from 12 percent of spending to 20 percent. Ad exchanges, which only got going late in 2009, accounted for 2 percent of expenditures. Lockhorn predicted more money would flow through them in 2010.
 
Despite excitement over new interactive formats, the overwhelming bulk of Razorfish's spending (77 percent) remained in standard display units. Rich media accounted for another 15 percent, with video at 8 percent.
 
The report, compiled based on spending data and a survey of Razorfish's media department, reveals some interesting impressions of digital media. Google, despite its efforts to be more than "just search," isn't viewed highly in other areas. Razorfish's media planners gave it the highest marks on a four-star system for search, but doled out single stars in other areas, ranging from performance display to video to mobile.
 
Looking ahead, Razorfish's list of publishers to watch includes Facebook, mobile ad network Greystripe, Hulu, Pandora and, perhaps most surprisingly, MySpace. On the latter, Razorfish praised the News Corp. property for mining profile data for ad targeting.

Congratulations! You’ve rocked another week. In addition to being seven days closer to your inevitable demise, it’s also likely that some critical social media resources slipped through the cracks in your Google Reader. Worry not. As always, we’ve gathered the goods back up and stashed them here in our weekly super list.

Below, you’ll find the case for a musical MySpace (), analysis of location-based sustainability, some social biz tips from the hospitality industry, and much, much more, all for just three easy payments of $29.95.

Just kidding, it’s free!

 

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Social Media

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• Why Facebook Must Get Serious About Privacy
  Facebook’s long list of privacy snafus continue to trouble the network as it sets its sites on web domination. Like Google before it, there are steps to be taken, and lessons to be learned before it can truly become an Internet () titan.
• 10 YouTube Videos of People Doing Amazing Things
  Bike stunts, musical feats, and some very fast clapping await you in this cavalcade of jaw-dropping YouTube () excitement!
• HOW TO: Send a Real Gift on Facebook
  When flinging a virtual cupcake at your friend just won’t cut it, Facebook () lets you send actual gifts in a social way. Here’s how to do it, along with a few alternative options.
• 5 Creative Uses for Crowdsourcing
  Some companies are tapping into the social web to solve problems and make decisions in interesting ways. These crowdsourcing approaches are food for thought.
• Why MySpace Can Still Win as a Music Destination
  Despite the ground it’s lost in the social network wars, MySpace remains a powerhouse as a music discovery site. Here are the reasons why, and what the site should do to stay in the social game through music.

For more social media news and resources, you can follow Mashable’s () social media channel on Twitter () and become a fan on Facebook.

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Tech & Mobile

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• 7 Unique Sites for Discovering New Music
  Whether you’re looking for rare audio and video from your favorite artists, or simply want to expand your musical palette, these seven unsuspecting sites will satisfy any audiophile.
• Top 5 DIY iPhone Stands [PICS]
  Ready to get all “MacGyver” on your iPhone () accessories? These five iPhone stands can be made from simple household items in a snap. Check it out!
• 10 Best “Get a Mac” Parodies [VIDEOS]
  It’s the end of an advertising era, and as the “Get a Mac” series hangs up its spurs, we thought it appropriate to wrangle the best send-ups of the iconic commercial.
• 10 Great Websites to Buy Handmade Goods
  If you love Etsy, there’s a whole new crop of handmade online marketplaces worth exploring. Here are ten of the best.
• Are Location-Based Services All Hype?
  While the buzz around location is ever-growing, the unwillingness to look at sustainability and mainstream penetration echos the tech bust of the mid 90s. This post takes a hard look at the numbers and trends.
• The Future of Web Fonts
  While advances in web code allow for some amazing things in your browser, there are a number of reasons why typography has been a stunted part of web design. Recent developments seek to change all that. Here’s a look at where we’ve been, and where we’re going in the world of web fonts.
• How Open Data Applications are Improving Government
  From agency transparency to public transit, when governments make data available to developers, the citizens win. Here are some cases where it’s really working.

For more tech news and resources, you can follow Mashable’s tech channel on Twitter and become a fan on Facebook.

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Business

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• How Data is Redefining Business Relationships
  Doing business in an online world is still all about relationships. Social data has made tapping into these connections more efficient and more comprehensive. This post details how.
• How Hospitality Companies are Using Social Media for Real Results
  Social media offers the hotel and restaurant industries unprecedented opportunities to connect with clientele and bring new business in the door. We spoke with some establishments who have had success.
• 6 Tips for Effective Recruiting on Social Media Sites
  Looking for the perfect job candidate has gotten a whole lot easier thanks to the social web. Check out these strategies for getting the most out of online recruiting.
• 5 Ways to Monetize the Future of News Media
  While journalism still struggles to find sustainable business models, startups and establishments alike are experimenting with new ways to monetize content. Take a look at these five points on the spectrum.
• 5 Ways To Turn Your Traffic Into Valuable User Data
  You may be getting hits to your site, but simply tallying the numbers may mean you’re leaving important data on the table — data you could use to target and even monetize your traffic. Check out these five apps that can turn clicks in to insights.
• HOW TO: Start a Small Business Social Good Campaign
  It’s no secret that people are more inclined to purchase from companies that are working to improve our world. Check out these tips if you plan to embark on a social good campaign.
• 5 Steps to Taking Customer Service Social
  By integrating social media, customer service is no longer relegated to a specific department, but can be practiced by your entire staff through personal interaction with customers. Here’s how to make it happen.
• HOW TO: Pick the Perfect Name for Your Startup
  There’s a lot to consider when choosing a name for your business on the web. Is it available? How does it sound? What does it really mean? We spoke to startup pros and linguists to get their tips.