Facebook, Bebo and MySpace may be booming in popularity, but new research shows that advertisers will spend just £115m on social networking websites in the UK this year.

The new report, by research company eMarketer, reveals a healthy 77% growth rate in ad spend on social networking websites in the UK from just £65m last year to £115m by the end of 2008.

Growth in ad spend on social networking websites in the UK will remain high between 2008 and 2009 with advertisers forecast to spend £175m, a 52% year-on-year increase, according to eMarketer.

However, this growth rate will slow to 28.6% in 2010, 15.6% in 2011 and 9.6% by 2012.

The report also shows that revenue from websites such as Bebo, Friends Reunited and MySpace in the UK will grow to just £285m, or 5.5% of total online ad spend, by 2012.

In the UK the top five social networking websites - Facebook, Bebo, MySpace, Flickr and Hi5 - had a combined total of 38.84 million monthly unique users in April, according to research firm comScore, yet have struggled to turn that popularity into pounds.

Emarketer recently cut its projections for global ad spend on social networks to £2.2bn in 2011.

This was down by £200m on its previous estimate of £2.4bn, because of concerns that websites such as Facebook will not be able to generate revenue from users at the speed initially expected.

"The amounts are tiny. eMarketer believes that although growth [of users] is large, ad spend is a tiny percentage of overall online ad spend," said Kris Oser, the director of strategic communications at eMarketer.

"The main reason for the low ad spend numbers is because social networking websites have not worked out a business model to monetise users. These companies are still very young."

· To contact the MediaGuardian news desk email editor@mediatheguardian.com or phone 020 7239 9857. For all other inquiries please call the main Guardian switchboard on 020 7278 2332.

· If you are writing a comment for publication, please mark clearly "for publication".