Social networks will push online revenue to $35 billion

A new report from Jupiter Research indicates that social networking may hold the key for online marketers. However, marketers should not count out the continued impact of search and display advertising.

by Kristina Knight

According to the report, online advertising will reach more than $35 billion by 2012 in the US. The US online ad spend is expected to reach about $19 billion this year. Though many have said that the content within social networks is not great, Emily Riley, an analyst with Jupiter says social networks will have a great impact on the overall ad spend in the coming years.

"Inventory on social sites is fulfilled largely through ad networks and contextual advertising, but as they mature, they will begin to use tactics such as behavioral targeting that allow for better monetization of their inventory," said Riley (via MediaPost). Riley credits the growth of social networks to the current availability of ad inventory.

As social networks continue to find their footing, display advertising will be the frontrunner in bringing in more ad revenue. Static image and text ads will account for the bulk of the display advertising spend. However, the report indicates that rich media formats will quickly make a move into the lead as the biggest draw for online revenue.