03:28 AM

Advertisers Flock To Cheap Social Network Ads: 1 in 5

Cheap display ads on social network sites have attracted large brands such as AT&T, Experian, Sprint and Microsoft, reports comScore.

The online measuring company estimated that in July, 2009, 20 per cent of all display ads appeared on social network sites with 80 per cent of those on MySpace and FaceBook.

The attraction is low cost says Jeff Hackett, comScore senior vice president.

"Social networking sites now account for one out of every five ads people view online. Because the top social media sites can deliver high reach and frequency against target segments at a low cost, it appears that some advertisers are eager to use social networking sites as a new advertising delivery vehicle."

More details here: Social Networking Sites Account for More than 20 Percent of All U.S. Online Display Ad Impressions, According to comScore Ad Metrix - comScore, Inc

Foremski's Take: comScore doesn't provide any historical data to determine trend lines.

The reason that ad inventory on social networks is lower cost is because the ads are less effective. However, if advertisers can figure out how to raise the response rate there is an excellent arbitrage opportunity waiting to be exploited.