Despite the ongoing challenges facing UGC sites to find a business model that works, and despite continued hesitancy among some major brands to even go near the explosive space, eMarketer predicts that category leaders such as YouTube, MySpace, Facebook and Photobucket will lead the charge in terms of legitimizing the medium over the next five years. ?The nearly tenfold increase in user-generated content advertising spending in the US reflects optimism in the ability of companies like YouTube, MySpace and Facebook to continue to build and retain vast audiences,? says the report.

Plus, users have shown no indication that creating their own Web content for others to consume is a passing fad, found eMarketer. By 2011, the researcher estimates there will be 95 million Web users creating content online, up from 64 million last year.

Among the various segments that have exhibited hefty growth over the last several years, eMarketer believes that social networking sites will command the biggest slice of the UGC ad pie ? perhaps due to how much further ahead sites like News Corp.?s MySpace as well as Facebook are at monetizing their content than Google?s YouTube. Spending on social networking sites should balloon to $3.6 million in 2011, up from the mere $445 million spent last year. By 2011, ad spending on these sites should account for nearly 7 percent of online advertising, says the report.

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