Social media revenues to hit $17b in 2012

Staff writer
27 Jul 2012

Social media revenue has been projected to reach $16.9 billion in 2012, up 43.1% from the year before.

Research firm Gartner claims advertising will continue to be the largest contributor to social media revenue. Ad revenue is projected to total $8.8 billion in 2012.

Social gaming revenue more than doubled between 2010 and 2011 and is expected to reach $6.2 billion in 2012, while revenue from subscriptions is expected to hit $278 million this year.

"Usage of online social media has matured, and more than one billion people worldwide will use social networks this year," said Neha Gupta, senior research analyst at Gartner. "Although 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."

Gartner expects the number of social media users to increase at a moderate pace, with new forms of media and entertainment to keep users engaged, as well as attract new ones. However, rising competition among social media players, each vying for consumers' leisure time and attention, will lead to the rise of new forms of social media (Web based and mobile).

Marketers are allocating a higher percentage of their advertising budget to social networking sites, mainly driven by the fact that these sites offer a large pool of engaged users who spend considerable time on these sites — this increases the potential click-through rates (CTRs).

Social media sites enable marketers to target ads to discrete consumer segments by unlocking the interconnected data structures of users that include lists of friends, their comments and messages, photos and all their social connections, contact information and associated media.

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