Social Media Sponsorships to Hit $56 Million in 2010
With more brands jumping on the bandwagon, a PQ Media study found social media sponsorships grew 13.9% to $46 million in 2009.
PQ Media defines social media sponsorships as "a digital word-of-mouth marketing segment in which brands provide material compensation, such as cash, products, points or trips, to social media content creators to promote and/or review their products and services through long-form text or status updates, often with accompanying visuals."
From the study:
- 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.
Of the segment, PQ Media CEO patrick Quin said, "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."