$16.9B Social Media Revenues To Reach in 2012; Predicts Gartner

In this year, the Analyst predicts social media revenues to reach $16.9B, where more than half ($8.8 B) revenues come from social media advertising.

You will be amazed or get frustrated with the idea that those who are using different types of social networks, you are not only just a user but also a product, prepare to grind up your teeth a bit more: this is the new forecast from Gartner, he notes that now-a-days even future ,advertising is the main way that social media services make money. Gartner predicts that this year social media will generate $16.9 billion in revenues, with more than 50%, $8.8 billion, to come from advertising.

The difference between two years, $16.9 billion in 2012 & $ 11.8 billion in 2011 represents a rise of 43 percent over last year. Although sales will continue to grow at fast way, however, Gartner notes in his blog that the user base of social media services, now numbering at more than 1.5 billion users, will only grow at a “moderate pace.”

 

According to Neha Gupta- A senior research analyst at Gartner, says that when it comes to consumer acceptance, social media has moved into a more mature phase with slower subscriber growth. But it doesn’t account for when & how social media sites will continue monetary services, how users will engage with them. 

She also said, “Although social media users is large in number, and few some cases increasingly mature in their usage patterns, the market is still now in its early stages from the perspective of revenue”. 

Moreover, it’s no surprise to hear that companies like Facebook, Twitter are ramping up their engineering efforts, as well as trying to make their platform more accessible to users that not only in PCs, but also, using mobile devices.

According to the analyst’s point of view, “How effectively different segments in the social media business model will perform, it looks like along with others form of revenues except advertising & gaming is also a strong factor for generating revenue.

Social games websites like Zynga, Wooga, Gree and others will bring in $6.2 billion in revenue this year. On the other hand, subscriptions to music services from Spotify.com or a premium video product on Facebook, YouTube will generate only $278 million for social media companies. 

It is clear that while services based on subscriptions are being created and promoted by sites, users are still looking for something which is free (or ad-funded) content where these are interested one. Perhaps, the reason why games are more successful in engaging more customers to pay their attraction as well as they have been working this into their revenue models from the start of their website.

Most of the website is performing well of their engineers efforts, users like us likely to keep seeing more developments in advertising, not just in terms of ads but analytics and “big data” advances. 

A report from tbgdigital.com, out last week which noted that Facebook was seeing a lot of engagement in its newer ad formats — Sponsored Stories & mobile ads with the social network, overall making 53% more ads than last year. It is clear that users are responding to their ads, as well as advertisers are getting more interested in going to where consumers are living these days.

Social media sites will create incentive or Kool-aid to all of its users. There is no surprise, if games are proving to be money-spinners, that the model will be used successfully elsewhere. 

Gartner says that this Social Media is one type of virtual goods, one example being virtual gift outside of a gaming environment. The Payments system is still a small part of revenue for companies like Facebook although it is increasingly incorporating them into the site in areas like applications. 

Gartner also notes that when there is further integration with connected TVs as well, this could also bring up opportunities for paying/ transfer money to others via your social media accounts.

The large revenue to be found in social gaming is also attracting to join a large number of new players to the specific gaming site, Gartner notes. One example for clear understands to you is that The Company Sony: which recently purchased cloud-gaming company Gaikai- where we might see significantly more activity.

For the non-advertising/gaming website, there are few other websites for revenue openings whose revenue is precious, Gartner notes. “Professional networking sites” such as LinkedIn and Xing, have seen some useful activity, because of the prevalence of free consumer-led services like Facebook, even these type of sites are looking for alternatives to make paid accounts effectively, with a bigger emphasis on advertising and other professional services themselves.

According to Neha Gupta, “New revenue opportunities will be seen in social media, but any new services will be able to bring significant fresh revenue to social media by 2016,” there is the biggest impact of growth in social media is on its advertisers. 

In the short & medium terms, social media sites should clarify genuine data analytic techniques that examine social networks to give marketers a more accurate picture of trends about their consumers’ needs and preferences on a customized basis in a specific products or services. However, they should also continue to utilize other channels of revenue like mobile advertising and social commerce.

What is your opinion about Social Media Ads & Social Media revenues? Should Social Networks used to make revenue by using ourselves? Share your thinking with comments.