Worldwide social media revenue is on track to reach $10.3 billion in 2011, a 41.4 per cent increase from 2010 revenue of $7.3 billion, according to Gartner. 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, says Gartner. Social media advertising revenue is forecast to total $5.5 billion in 2011, and grow to $8.2 billion in 2012. Advertising revenue includes display advertising and digital video commercials on any device including PCs, mobile and media tablets.
Social gaming revenue is on pace to reach $3.2 billion in 2011 and grow to $4.5 billion in 2012. 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 million in 2011 and total $313 million in 2012. Some 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.
Neha Gupta (Senior research analyst, Gartner): 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.
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.”