Social media revenue to reach $16.9 billion in 2012, up 43.1 percent

Infotech Lead India: Social media revenue is likely to reach $16.9 billion in 2012, up 43.1 percent from $11.8 billion in 2011.

Advertising revenue of social media will be $8.8 billion in 2012.

Social gaming revenue has more than doubled between 2010 and 2011 and is expected to reach $6.2 billion in 2012. Revenue from subscriptions will be $278 million this year.

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

New forms (Web based and mobile) of media and entertainment will keep users engaged on social media sites and attract new ones. 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.

Gartner suggests that 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.

Social media sites will continue to incorporate gaming techniques on their networks, driven by the monetization opportunities that it presents. The sale of virtual goods will remain the primary source of revenue.

Major console gaming publishers have recently entered the social gaming arena and are adding momentum to the social gaming industry by utilizing their intellectual properties. Gartner expects this trend to have a favorable impact on social gaming revenue as consumers are likely to be attracted to familiar gaming titles.

Some of the big social developers such as Zynga, GREE and DeNA have moved to an open-platform strategy, enhancing user convenience and choice.

Social sites are moving toward lower subscription fees and shifting focus to other sources of revenue, such as advertisement-based sales. This is corroborated by the fact that many of the professional sites (including LinkedIn and Xing) that charge for premium services observed a decline in the subscriptions revenue ratio. Apart from a few exceptions, Gartner continues to see limited success with the premium subscription models.

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