A recent report by Gartner states that global revenues of social media is expected to grow by 43.1 per cent to reach $ 16.9 billion in 2012 as against $ 11.8 billion in 2011. It further stated that advertising will continue to be the largest contributor to overall social media revenue and is projected to reach $ 8.8 billion in 2012.
In 2012, the revenues from social gaming are expected to reach $6.2 billion, while revenue from subscriptions is expected to reach $ 278 million. The research further stated that marketers are allocating a higher percentage of their advertising budget to social networking sites. This is mainly driven by the fact that these sites offer a large pool of engaged users who spend considerable time on these sites, which increases the potential click-through rates. According to the report, social media sites will continue to incorporate gaming techniques on their networks and the sale of virtual goods will remain the primary source of revenue.
Neha Gupta, Gartner Senior Research Analyst said,” Usage of online social media has matured, and more than one billion people worldwide will use social networks this year. New forms 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 (web based and mobile). The biggest impact of growth in social media is on the advertisers. In the short and medium terms, social media sites should deploy data analytic techniques that interrogate social networks to give marketers a more accurate picture of trends about consumers’ needs.”