Cross post: Full post over at the Lookery corp blog here.
Summary: eMarketer came out with some essentially nutty projections for the future of social net advertising. As much as I wish and I hope eMarketer is right given my involvement with Lookery and the world market for that advertising grows to $4.1 billion by 2011, their numbers don’t quite add up when you take a closer look. Yes, $4.1 billion a year for likely the most dominant category of online user engagement doesn’t seem like much when compared to the $20 billion search will pull in, but that doesn’t justify potentially silly modeling by eMarketer. As you’ll see in the post eMarketer builds its model on some pretty wild and crazy RPM assumptions (that term is explained as well) that would require essentially turning every pixel on your social net profile into ad inventory. Not going to happen.
That being said – I bet there will be a hundred VC pitches in the next few weeks who will gladly pimp these projections as justification for their ad supported social net startup. Too bad no one will question their validity.