One of the more intriguing contests of the campaign may center on record election year ad spending on social networks like Facebook (NASDAQ:FB)
2012 has been dubbed the social media election, but amid a cacophony of TV ads hitting swing state airwaves in the final 40-plus days of the presidential election, analysts and investors have yet to outline how a surge of campaign ad spending will impact the business models and quarterly earnings of social networks like Facebook, Pandora, LinkedIn, and Twitter.
Some analysts expect ad spending this election cycle to add meaningful third and fourth quarter revenue for Facebook and Pandora. Arguably even more important than a one-time earnings boost will be the social media giants proving their respective business models work in generating ad dollars as investors demand a clearer picture on platform monetization.
A back of the envelope calculation by Michael Pachter, a managing director of research with Wedbush Securities, signals that social networks may see an election cycle revenue boost of over $100 million in the second half of 2012.