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In recent news relevant to Lookery, eMarketer came out with projections for the amount of social media advertising last week. As much as their bullish projections for a worldwide spend of $4.1 billion in 2011 and US spend of $2.5 billion in that same year make a compelling case for Lookery, we wanted to throw some water on author’s Deborah Aho Williamson’s numbers to see if we can sober them up.

So let’s take a looksy by working towards deriving RPM for the Social Nets (Note: RPM = Revenue per 1,000 page views not to confused with CPM or Cost per 1,000 impressions):

Sources for these numbers - here and here (eMarketer breaks them up into different releases for some silly reason we can’t imagine)

So far so good. Now let’s see how those numbers translate to various RPM’s (for those playing at home all you need to do is divide the annual revenue per user by the estimated # of page views per user per year then multiply that by a 1,000 and voila you have RPM):

Now this is where the sobering cold water comes into play: Facebook and MySpace command about 70% of the US Social Net ad spend ($650 mil out of $900 mil in ‘07) and according to sources we trust are earning an average CPM well less then $0.20 across their inventory and properties (not an indictment of either company just a reality of the value of profile-based ad inventory).

Generously assuming a $0.20 CPM would mean that those social nets would have to an average of 6 ad units per page and AFAIK that isn’t happening. Let alone the 13 ad units per page in 2008 or close to 25 in 2011. And that’s with 6,000 page views per year per user (which in fairness is what Facebook is seeing today though I can’t believe that number holds up as Facebook moves into the mainstream). Even if the social nets can double or triple their eCPM’s you’re still looking at projection based on potentially hundreds of ad units per page if you use a more conservative page views per user assumption.

As much as us Lookery folk love a good ad or two, not even we could handle a hundred ads on our various social net profiles.