May 11, 2010 at 04:03 PM
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Study: Social Media Sponsorship Grows 14% in 2009

A new report from PQ Media says that social media sponsorships grew 13.9% to $46 million in 2009, bucking downward trends experienced by traditional advertising mediums.

PQ's report came to the following conclusions:

  • The value of paid and non-paid social media sponsorships grew at a compound annual rate of 77.6% from 2004 to 2009, accounting for 2.7% of total word-of-mouth marketing spending in 2009, up from only 0.5% in 2004.

  • PQ Media expects the total value of social media sponsorships to increase 23.6% in 2010 to $56.8 million, driven by a stronger advertising and marketing environment as the economy improves, as well as continued pressure on brands to increase their presence in social media.

  • Cash-sponsored social media, available through sponsored conversation firms, is the fastest-growing social media sponsorship segment, with spending rising 37.3 percent in 2009 to $10.3 million, driven by brand requirements to reach specific “influentials” such as young females and working mothers.

    “Brand marketers move dollars to where their target consumers are spending time to build relationships with them and, as social media captures more of consumers’ time, brands are warming to social media sponsorships as a new method to engage, educate and activate them,” said Patrick Quinn, CEO of PQ Media.

    “This is a very young marketing category, but we view it as significant because of its impressive growth in the face of declining overall ad spending. We believe this sector will be among the fastest-growing alternative media in the near future because of the growth of social media, driven by popular mobile and online applications and devices, as well as the FTC’s transparency guidelines, which require social media content creators to disclose when they receive compensation in exchange for editorial coverage.”

    The report found that the largest brand categories by spending in 2009 were CPGs, food & beverage, health & beauty, and media & entertainment. While social media sponsorships accounted for less than 3% of overall word-of-mouth marketing spending in 2009, this share is expected to continue grow according to the media research firm.

    The report cites the industry's development of more structured platforms around social media sponsorships as one reason for growth.

    "The sponsored conversations category is exhibiting strong growth because leading social networks, such as YouTube, are beginning to develop partnership programs in order to forge agreements with brands to allow end users to generate cash by hosting video blogs about products they purchased," the report states.

    One such program PQ says allowed several YouTube users to generate over $100,000 in a year in sponsorship. Certainly not the norm for sponsored vloggers, but a data point indicating its potential for future growth as brands become more accustomed to "sponsored conversations."