As social networking sites grow in popularity not only with users but also advertisers, they will begin to attract hundreds of millions in ad spend, and soon surpass the $1 billion mark.

U.S. advertisers will spend some $280 million on social networking sites this year (mostly to create profile pages and sponsored promotions), or 1.7 percent of total U.S. online advertising spend, writes MediaPost, citing a new eMarketer report. (Advertisers in international markets are expected to spen $70 million.) And by 2010, social networking sites are projected to take in $1.86 billion, or 6.3 percent of all U.S. online advertising. MySpace is estimated to garner $180 million in U.S. ad revenue this year.

"Obviously, advertisers want to go where the eyeballs are," Debra Aho Williamson, eMarketer senior analyst and author of the report "Social Network Marketing: Carving Out MySpace," is quoted as saying. Moreover, user-generated content and word-of-mouth are two big buzzwords right now in online marketing, and social networks give marketers an opportunity to experiment with both," according to Williamson.

Most of MySpace's ad revenue has come from promotional efforts by brand advertisers that create a MySpace profile and sponsor branded content. Revenue from regular display ads constitutes a small percentage, totaling around $11.8 million in the first half of the year, according to eMarketer. The average CPM is a mere 10 cents or so, according to the New York Times.

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