Borrel conducted an assessment of advertising palced on social networking sites and found that nearly 20% of all ad spending is done by local businesses. While you might think that most were on a national basis, Borrel estimates that local advertisers will account for about $641 million of nearly $3.3 billion this year trying to reach consumers via these sites.
Borrel does point out that the total spend is still miniscule; just 3% of all locally spent online advertising is on social networks. The research also indicated that 57% of all the local/social advertising is going to Facebook and MySpace - the only two sites generating more than $100 million from local placement of ads. Facebook consequently generated 74% of its ad revenues from local businesses.
Borrel will continue studying social network ad spending, but download the projections here.