The average revenue per user (ARPU) of social networks should reach $4 this year, according to a new white paper from Deloitte. “Technology, Media & Telecommunications Predictions 2011” forecasts social network advertising ARPU will approach $3.50.
These figures are an improvement from estimates of more than $3.50 total ARPU and $3 advertising ARPU for 2010, as well as hard figures of a little more than $3 total ARPU and about $2.50 advertising ARPU for 2009.
SocNet Users to Reach 1B
Deloitte estimates worldwide social network membership will reach about 1 billion this year, meaning total social network ARPU should equal around $4 billion. In addition, social networks may deliver more than 2 trillion ads this year. Yet Deloitte expects social networks to only produce less than 1% of global ad spend during 2011.
Ads Represent Majority of SocNet Revenues
Ads have represented and are expected to continue to represent the vast majority of social network revenues. In 2009, global social network revenues reached about $3 billion, with social gaming virtual goods revenues (the other primary social network revenue stream) representing only about $500 million (Editor’s Note: MarketingCharts providing numerical estimates based on visual analysis of this chart).
In 2010, Deloitte estimates total global social network revenues were about $4 billion, with social gaming virtual goods producing $500 million to $750 million of that total. During 2011, Deloitte estimates total global social network revenues of about $5 billion, with social gaming virtual goods producing about $1 billion.
Social Media Drives Mobile Brand Engagement, Lead Gen
Social media, as a post-click campaign action, represented 26% of the mobile campaign actions in October 2010, according to Millennial Media. The top advertisers on the Millennial network from the finance, automotive, entertainment and retail verticals leveraged the social media platform to drive further brand engagement, as well as lead generation.