Ad spend in social media

eMarketer estimates that advertisers will spend $1.4 billion on social network advertising this year.

This figure takes into account all forms of social network advertising including search and banner ads as well as widgets and apps.

I wonder if that $1.4 billion might be better spent on getting people to engage and interact with brands rather than simply placing ads on Facebook and MySpace pages?

Then again, if brands were smart enough to do that, where would the social networking sites get their income from?