Social media sponsorships grew 13.9 percent to $46 million in 2009, despite double-digit declines in traditional advertising spending, according to new research released by alternative media econometrics firm PQ Media.
In its Social Media Sponsorships Forecast 2010-2014, Stamford, Conn.-based PQ Media defines social media sponsorships as a digital word-of-mouth marketing segment where brands provide 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.
PQ Media divides social media sponsorships into two major segments. The first is cash-sponsored social media, which includes sponsored conversations. The other category, nonpaid sponsored social media — where a social media publisher is provided samples of a product or coupons — includes digital brand ambassador programs; digital seed/viral campaigns; and digital marketing agencies.
Additional findings from the report include the following:
- The value of paid and nonpaid social media sponsorships grew at an annual rate of 77.6 percent between 2004 to 2009, accounting for 2.7 percent of total word-of-mouth marketing spending in 2009, up from 0.5 percent in 2004.
- The total value of social media sponsorships will increase 23.6 percent 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, or sponsored conversations, 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.
- The largest brand categories by social media sponsorship spending in 2009 were consumer packaged goods, food & beverage, health & beauty, and media & entertainment.