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comScore’s Year in Review and the Year Ahead

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Last week, market researcher comScore released its U.S. Digital Year in Review report that’s chock full of useful data. From it, a number of social media industry implications arise, including Facebook’s advertising value problems, communications platform evolution and potential social commerce growth barriers.

Cracks in Facebook’s Dominance?

Facebook now consumes more of U.S. users’ time spent online than any other property, passing stalwarts like Google and Yahoo for the first time. As a result, Facebook now shows more ads than any other online property. But advertisers don’t value those spots as highly as they do the ad inventory of other companies. Researcher eMarketer estimates Facebook did $1.86 billion in ad sales in 2010. Compare that estimate, which might be on the high side, with Google’s 2010 actual sales of $28 billion. Still, Facebook may be approaching Yahoo’s $5 billion and Microsoft’s approximately $2 billion, and has probably passed AOL’s $1.3 billion.

Retailers tell me that Facebook ads don’t convert to direct actions as well as others’, although companies like Zynga and Groupon optimize Facebook ads fairly effectively for customer acquisition. Facebook’s inability to command high prices for its ads begs re-asking the perennial question: Is a communications-based medium simply less effective for advertising than a content-based one? Besides continuing to improve its targeting and optimization tools, Facebook must improve the richness of its formats and sponsorships to tap brand advertising budgets.

Communications and Social Commerce Trends

The comScore report’s decline of email chart — time spent using web-based email, to be exact — is getting a lot of coverage. Overall usage is down a bit, although it’s essentially flat for 18-24 year olds, whom you’d think would be the ones replacing email with mobile mail or social networking.

The report shows spectacular traffic growth to daily deals sites Groupon (7x growth) and LivingSocial (4x), as well as solid growth for flash sales sites like Gilt and RueLaLa. Social commerce is definitely hot, but these businesses depend on email newsletters. If there’s anything to the email decline story, those companies will have to rely even more on ad spending to maintain their growth.

There’s plenty more we can gather from these statistics. To ready my in-depth analysis, as well as a forecast of trends to watch for, check out my weekly update at GigaOM Pro.

Image courtesy of: flickr user mararie

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