This article was published on November 3, 2011

Global social networking revenues to double by 2016, report says

Global social networking revenues to double by 2016, report says

Did you know that Facebook was gaining ground in all emerging markets, including Brazil where one-time champion Orkut seems less and less unbeatable? And did you know that altogether, social networks now have over one billion users across the globe?

According to a report from the market intelligence firm Strategy Analytics, facts like these are expected to result in a 121% increase in global social networking revenues by 2016.

Growing in emerging markets, maturing elsewhere

According to the firm’s 2011 Global Social Network Market Forecast, this revenue should reach $12.6 billion in 2016, doubling this year’s figures. This growth will come both from emerging and developed markets. Indeed, social networks have become both a central communications tool and an increasingly important advertising medium.

This may impact revenues in two ways. On one hand, their role in communications means that they have a considerable potential in emerging markets, which should fuel revenue growth. On the other hand, their strong position in developed markets mean they are more and more attractive for brands and online advertising campaigns, which also generates revenue.

Beyond Facebook

According to the report’s author, the analyst Leika Kawasaki, it’s not just about Facebook:

“While Facebook remains the top social network worldwide with over 800 million active users, other regionally focused social networks continue to meaningfully augment a rapidly growing market.”

The key factor, she says, will be social networks’ ability to work with third parties:

“Strategy Analytics sees the key to generating revenue in an increasingly competitive market will rest on operator willingness to extend their embrace of the online landscape through building partnerships with brands and integrating of a variety of service providers into their social network platforms.”

In summary, social networks are both improving their global market penetration and increasing audience engagement. If they know how to collaborate with third parties, this could indeed very well result in sustained revenue growth over the next years.

What do you think of this report’s findings? 

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