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Social Media: Huge Growth in Advertising Revenues
The question of how Social Media companies would ever make any money has been answered.
Worldwide revenues for Social Media companies, like Facebook and LinkedIn are growing rapidly. A recent report from Gartner estimated that Social Media revenues will grow this year at more than 41 percent, reaching a total of $10.3 billion, compared to just $7.3 billion in 2010. Their projection is that revenues will climb to $14.9 billion in 2012 and reach $29.1 billion by 2015.
One segment of Social Media that is especially growing quickly is gaming. Social gaming revenue is expected to reach $3.2 billion in 2011 and grow to $4.5 billion in 2012.
Most Social Media revenue comes from advertising. Gartner thinks that companies will increasingly use Social Media as a major outlet for their ad dollars. They also see the nature of Social Media advertising changing. Many companies will move from simple targeted ‘click advertising’ to broader campaigns, something Gartner refers to as ‘ongoing engagement’. Neha Gupta, senior research analyst at Gartner, said that this trend towards closer engagement with users is one that is attractive to advertisers “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.”
But consumers can be fickle. Another report from Gartner earlier in the year found that many consumers are getting both bored and burnt out with Social Media and found that a sizable group of people who were using Social Media significantly less than they once did, a trend that Gartner called ‘Social Media fatigue.’ Brian Blau, research director at Gartner and author of that earlier report, said that “The trend shows some social media fatigue among early adopters, and the fact that 31 percent of Aspirers (younger, more mobile, brand-conscious consumers) indicated that they were getting bored with their social network is a situation that social media providers should monitor, as they will need to innovate and diversify to keep consumer attention.”
