Social media revenue to hit $10.3bn
Johannesburg - Global social media revenue is set
to reach $10.3bn in 2011, up 41.4% from 2010 revenue of $7.3bn, according to new data out on Tuesday by IT research and
advisory company Gartner.
Worldwide social media revenue was forecast for consistent
growth with 2012 revenue expected at $14.9bn, and the market was
projected to reach $29.1bn in 2015, it said.
Advertising revenue was, and would remain, the largest
contributor to overall social media revenue. Social media advertising
revenue was forecast to total $5.5bn in 2011, and grow to $8.2bn in 2012.
Advertising revenue included display advertising and
digital video commercials on any device including PCs, mobile and media
tablets, Gartner explained.
"Marketers will begin to transition from 'onetime placement
and click of ads' towards '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
"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 revenue was on pace to reach $3.2bn in
2011 and grow to $4.5bn in 2012. Social gaming included revenue
that social networking sites earned directly from users who played games
that were 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 also included revenue earned from
"virtual wallets" within games.
"We have seen social networks take a platform-orientated
approach to game monetisation. That is, the social networks have evolved
into platforms for social gaming by publishing APIs (application
programming interfaces) that help build an ecosystem of developers and
publishers," Gupta said.
"The dominant monetisation 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 was forecast to reach $236m in 2011 and $313m in 2012. Only a few social sites
charged subscriptions, and those that did mostly billed only for premium
services, Gartner pointed out.
Some professional sites such as
LinkedIn, Xing in Germany and Vladeo in France charged a subscription
fee from their users for enhanced services, such as an expanded profile
"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," Gupta
"Market participants need to build new business models to tap into
this increased usage and users' increased level of engagement."