Facebook, Google+ Spurring Social Media Sales to $30B

 
 
By Clint Boulton  |  Posted 2011-10-13 Email Print this article Print
 
 
 
 
 
 
 

Social media sales from social ads, virtual currency and subscription services are poised to grow to $15 billion next year and double that figure by 2015. Facebook and Google will lead the way.

Led by advertising sales, worldwide social media revenue will grow 50 percent in 2012 from 2011, rising from a projected $10.3 billion this year to $14.9 billion next year and more than $29 billion by 2015, according to Gartner research.

Social media advertising revenue, including money earned from display ads and digital video commercials across desktops computers, laptops, smartphones and tablets, will total $5.5 billion in 2011, growing to $8.2 billion in 2012.

The numbers are significant at a time when Google is trying to challenge incumbent Facebook with its own social network, Google+. Facebook has more than 800 million users worldwide. Google+ may have 50 million after less than a month since it opened to the public.  

However, while Facebook has the massive network of users and data associated with them, Google has a glut of search data backing its huge advertising cash cow.

Facebook is reportedly on track to make more than $4 billion in advertising this year, according to eMarketer. Google makes $30 billion a year from a combination of desktop search, mobile search and display ads served on YouTube and other properties.

Through social ads and its Credits virtual currency platform, Facebook has been actively exploring its monetization capabilities. Google has yet to focus on advertising Google+, yet the data generated on Google+ would seem to provide the search giant with a passel of new opportunities.                

Gartner sees the sales potential for social networks as a huge growth market. "Marketers will begin to transition from 'onetime placement and click of ads' toward 'ongoing engagement' with the Internet user and will therefore allocate a higher percentage of their advertising budget to social networking sites," said Neha Gupta, senior research analyst at Gartner.

Gupta attributed the addressable market growth to the ability of social networks, using social analytics software to tap into friends' lists and other social connections, comments and messages, contact information and associated media, such as shared videos.

Indeed, Google earlier this week acquired social analytics startup SocialGrapple, a sign the company is actively looking to separate signal from noise in the growing glut of Google+ data.

Other opportunities beside social analytics exist. Social gaming sales are on point to hit $3.2 billion this year, growing to $4.5 billion next year, with Facebook and partner Zynga responsible for a lot of that revenue. Google+ itself added games from Zynga and other social gaming developers in August.

There are also sales opportunities for social media subscriptions, which Gartner believes will top $236 million in 2011 and total $313 million in 2012.

Professional sites such as LinkedIn, charge a subscription fee from their users for enhanced services, such as an expanded profile view. However, it is unclear whether Google and Facebook will explore this route in the future.

Gartner will present its data at the Gartner Symposium/ITxpo 2011 in Orlando, Fla., next week, though readers may want to peruse reports authored by Gupta, including "Forecast: Social Media Revenue, Worldwide, 2010-2015" and "Market Insight: Social Media Market Tops $7 Billion, Driven by Advertising."   

 
 
 
 
 
 
 
 
 
 
 
 

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