Global social media revenue to touch $16.9 bn in 2012

by CXOtoday News Desk    Jul 26, 2012

social media gartnerSocial media revenue worldwide is expected to reach $16.9 billion in 2012, a whopping increase of 43.1 percent from the previous year, according to research firm Gartner. The social media revenue stood at $ 11.8 billion in 2011. The study noted that advertising will continue to be the largest contributor to overall social media revenue and is projected to touch $8.8 billion in 2012, as more enterprises are getting upbeat about this platform.

According to Gartner Senior Research Analyst Neha Gupta, “The usage of online social media has matured, and more than one billion people worldwide will use social networks this year.” she added that even though the number of social media users is large, and in some cases increasingly mature in their usage patterns, the market is still in its early stages from a revenue perspective.

Speaking about the trends, Gupta said that social media sites will keep users engaged with newer forms of information and entertainment. Rising competition among social media players, each vying for consumers time and attention, will also lead to the rise of new forms of social media that includes both web based and mobile.

The study also noted that enterprises are allocating a higher percentage of their advertising budget to social networking sites. This is mainly because consumers spend a considerable time on these sites, which increases the potential click-through rates.

“Social media sites are becoming more innovative in their ad products to attract marketers. Social networking sites should deploy data analytic technologies that interrogate social networks to give marketers a more accurate picture of trends in accordance with consumers’ needs and preferences,” Gupta said.

Another area that is witnessing a high growth is Social gaming. The revenue in this segment more than doubled between 2010 and 2011 and is expected to reach $6.2 billion in 2012, while revenue from subscriptions is expected to total $278 million this year. Gartner expects social media sites to incorporate more of gaming techniques on their networks to drive more profitability. The sale of virtual goods will remain the primary source of revenue, said Gartner.

On the whole Gupta indicated that the biggest impact of growth in social media is on the advertisers. In the short and medium terms, social media sites should deploy data analytic techniques that interrogate social networks to give marketers a more accurate picture of trends about consumers’ needs, she said.