Worldwide social media revenue is to reach $10.3bn in 2011, up 41% on last year, with ads and games as the key drivers for growth, according to a new report. The study, from Gartner, predicts that worldwide social media revenue is forecast for consistent growth with 2012 revenue totaling $14.9 billion, and the market is […]
Worldwide social media revenue is to reach $10.3bn in 2011, up 41% on last year, with ads and games as the key drivers for growth, according to a new report. The study, from Gartner, predicts that worldwide social media revenue is forecast for consistent growth with 2012 revenue totaling $14.9 billion, and the market is projected to reach $29.1 billion in 2015. Advertising revenue is, and will remain, the largest contributor to overall social media revenue. Social media advertising revenue is forecast to total $5.5 billion in 2011, and grow to $8.2 billion in 2012.
24/10/2011
Advertising revenue includes display advertising and digital video commercials on any device including PCs, mobile and media tablets.
“Marketers will begin to transition from ‘onetime placement and click of ads’ toward ‘ongoing engagement’ with the Internet user and will therefore allocate a higher percentage of their advertising budget to social networking sites,” said Neha Gupta, senior research analyst at Gartner. “This is mainly because social networking sites, with the help of social analytics firms, are able to unlock the interconnected data structures of users — mapping lists of friends, their comments and messages, photos and all their social connections, contact information and associated media.”
Social gaming catching ad revenue?
Social gaming revenue is on pace to reach $3.2 billion in 2011 and grow to $4.5 billion in 2012.
Social gaming includes revenue that social networking sites earn directly from users who play games that are developed in-house, and the revenue earned by allowing game developers/publishers to use their sites as a platform to let users play with friends on the network.
It includes revenue earned from “virtual wallets” within games (such as when users spend virtual money on in-game items like swords or tanks, or to create virtual armies).
“We have seen social networks take a platform-oriented approach to game monetization. That is, the social networks have evolved into platforms for social gaming by publishing APIs that help build an ecosystem of developers and publishers,” Gupta said. “The dominant monetization models for social games are ad-led and ‘freemium’ models. The free-to-play games are funded either through advertising (wall advertisements and in-game branding) or through in-game monetary transactions that enable users to ‘level up’ or buy virtual goods.”
Social media subscription revenue is forecast to reach $236 mn in 2011 and total $313 million in 2012.
Few social sites charge subscription revenue, mostly for premium services.
Some professional sites such as LinkedIn, Xing in Germany and Vladeo in France, charge a subscription fee from their users for enhanced services, such as an expanded profile view.
“From a revenue perspective, the social media market is still in its early stages, even though it has a large number of users who, in some cases, are exhibiting increasingly mature usage patterns,” Ms. Gupta said. “Market participants need to build new business models to tap into this increased usage and users’ increased level of engagement.”
Methodology
To calculate social media revenue, Gartner analysts defined “social media” as including websites where: (1) content is created, consumed, promoted, distributed, discovered or shared for purposes which are primarily related to communities and social activities, rather than functional, task-oriented objectives; (2) content usually takes the form of words, pictures or videos; (3) the website may be a closed or an open platform; and (4) the flow of expression can be unidirectional or multidirectional.
www.gartner.com/
