Social Media Sponsorships to Reach $56.8M in 2010

Amid double-digit declines in traditional ad spending, the emerging category of social media sponsorships grew 13.9% to $46.0 million in 2009 and is forecast to climb 23.6% to $56.8 million in 2010, driven by higher demand among advertisers to reach social media's target audiences, according to a study by PQ Media.

Social media sponsorship, a digital word-of-mouth marketing segment, refers to material compensation (including cash, products, or points) provided to a social media content creator by brands in return for promoting or reviewing their products.

The value of paid and nonpaid 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, according to PQ Media.

Below, additional findings and analysis from PQ Media's report, Social Media Sponsorships 2010-2014.

Much of the growth in sponsorships registered in 2009 was driven by smaller companies that were able to sign a handful of new clients, while the larger social media sponsorship players were posting low single-digit growth rates due to existing clients with reduced marketing budgets.

Cash-sponsored social media, available through sponsored-conversation firms, is the fastest-growing social media sponsorship segment, reaching $10.3 million in 2009, up 37.3% from the previous year, driven by brand requirements to reach specific "influentials" such as young females and working mothers.

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