The online Social Networking market is emerging from an immature period of competitive dislocation to one of market maturity, in which clear user needs and platform value propositions have emerged, paving the way for incumbency, scalability and successful monetization.
Not just another ‘how to make money via social networking; report, 'Monetizing Social Networking' is a thorough examination of the totality of emerging value chains, quantifying commercial opportunities along the value chain. It examines these opportunities in the business / strategic context, whereby there will be a ‘few winners take all’ fall-out. The report will be of major significance to brand owners and marketers, but will also deliver a key business advice and data reference vehicle for all stakeholders in the value chain.
'Monetizing Social Networking' qualifies and quantifies the commercial opportunities that are available and will emerge in the near term in online social networking for brand owners, advertisers, content providers, apps developers, hardware and software providers, as well as the social networking platforms themselves and their user communities. The period between 2010–2012 represents the key near term strategic window in establishing incumbency in the social networking market, and the market is racing towards maturity by 2015.

Key features of this report

• Quantification of opportunities
• Segmentation of opportunities by geography
• Segmentation of opportunities by stakeholder type
• Segmentation of opportunities by user community demographics
• Full analysis of impact of social, technological, regulatory and business drivers
• Full coverage of Asian and European as well as US markets
• Profiles of 18 leading social networking stakeholders


Scope of this report

• Gain a unique quantified data platform of how online social network markets are gaining scale, and delivering direct and indirect revenue opportunities across the whole value chain
• Access uniquely comprehensive and robust data to permit business planning for global strategy, including forecasts to 2015
• Understand how the competitive environment is changing, and how networks themselves will remain in a difficult financial position, while opening up large revenue opportunities for others.
• Access detailed data and insight into the market globally with all major markets detailed. 20 leading markets representing 88% of global opportunity are separately profiled.

Key Market Issues

• There is apparent value in the scale and growth offered by online social networking, but platforms and other stakeholders need to establish how to successfully monetize this potential.
• There is a lack of clarity regarding the scale, category segmentation and geographic reach of the developing social networking market, making monetization strategy elusive.
• A strategic shakeout is required, in part due to the rise of Facebook, if many current providers are to survive – at the same time, Facebook risks overstretch, and other rising networks such as Twitter and LinkedIn face an unclear monetization path.
• Most stakeholders, especially brand owners and advertisers, will have to move in the period 2010-11 away from a non-quantified, hopeful social media presence and towards a planned, quantified, sophisticated social media strategy.


Key findings from this report

• The online social networking market is emerging from an immature period of competitive dislocation to one of market maturity, in which clear user needs and platform value propositions have emerged, paving the way for incumbency, scalability and successful monetization.
• Online social networks have attained mass - already being used by 971m unique users at the end of 2009.
• Online social networking is becoming a meaningful global phenomenon. The US and Western Europe will continue to be major markets, and will see very strong levels of absolute growth. These early adopter markets are, however, declining in terms of proportion of global users with Asia increasingly dominant.
• In the face of Facebook’s dominance, most networks are embracing a ‘double niche’ strategy – focusing upon clear customer segments and service categories. LinkedIn, for example, targets professionals aged 30-55, and offers professional and career networking services. Hi5 is becoming a specialist gaming network aimed at the 16-29 audience.

Key questions answered

1. What is the scale of the opportunity provided by social networking?
2. How will social networking usage grow in the period 2010-2015?
3. What are the competitive positions of major platforms?
4. Who are the main stakeholders, and what is their position in the value chain?
5. What is the market reach of the major platforms?
6. Are current business models sustainable?

Monetizing Social Networking
Executive summary 12
Social networking market context 12
The dynamics of the social networking marketplace 12
Social networking competitive situation analysis 13
Monetizing the social networking market 14
Stakeholder profiles 15
Chapter 1 Social networking market context 18
Summary 18
Introduction 18
Who is this report for? 19
Development of the social networking market 20
Chapter 2 The dynamics of the social networking marketplace 28
Summary 28
Introduction 29
Notes on data and sources 29
Global overview 30
Market scale and growth 30
Market reach 33
15 leading national markets dominate worldwide 35
Regional markets 37
North America 37
North American social networking markets 38
USA 38
Canada 40
Western Europe 41
Major Western European national social networking markets 44
UK 44
Germany 46
France 48
Italy 50
Spain 51
Central and Eastern Europe 53
Major Central and Eastern European national social networking markets 55
Russia 55
Central and South America 57
Major Central and South American national social networking markets 58
Brazil 58
Mexico 60
Asia 62
Major Asian national social networking markets 64
China 64
Japan 65
South Korea 67
India 69
South East Asia 71
Indonesia 71
Philippines 72
Singapore 73
Other major markets 75
Australia 75
South Africa 77
Turkey 78
Other geographies 79
Forecast market opportunity 80
Factors promoting and restricting the growth of social networking 80
17 national markets will exceed 20m users by 2015 83
Chapter 3 Social networking competitive situation analysis 86
Summary 86
Competitive overview 87
Introduction 87
Facebook – the first global social network 88
Facebook’s rise drives emergence of strategic clarity 96
Likely competitive paths, 2010-2015 100
Competitor monetization strategies, 2010 100
Competitor monetization strategic paths, 2010-2015 101
Chapter 4 Monetizing the social networking market 106
Summary 106
Introduction 107
Note on methodology and sources 108
The consumer expenditure reach of social networking 110
Direct revenues earned through online social networks, 2010 and 2015 114
Direct revenues earned through social networking sites 114
Global overview 114
Revenue 114
ARPU 116
Detail of the scalable markets emerging by 2015 117
Revenue 117
ARPU 118
Implications for stakeholders 120
Models of future monetization 120
Implications for online social network technology infrastructure suppliers 122
Implications for brand owners and advertisers 123
Implications for games, apps and virtual goods developers 125
Implications for networks 127
Chapter 5 Stakeholder profiles 130
Summary 130
Introduction 131
Social networking platforms 132
Facebook 132
QQ.com (Tencent) 134
Twitter 135
MySpace 137
Friendster 139
Hi5 Networks 140
LinkedIn 142
NetLog 144
Cyworld 145
Mixi 146
Social gaming developers 148
Zynga 148
Playdom 148
Playfish 149
SGN 150
Custom social network services 152
Elgg 152
TweetMeme 153
Brands using social networks 154
Kimberley Clark 154
Majestic Wines 154
Chapter 6 Appendix 157
Index 157
List of Figures
Figure 1.1: Launch dates of major social network sites 21
Figure 2.2: Social network user growth (users m), 2009-15 by region 31
Figure 2.3: Proportion of population using social networks by region (%), 2009-15 33
Figure 2.4: Social network user growth (users per country, m), 2009-15 36
Figure 2.5: Social network user growth in North America (users m), 2009-15 37
Figure 2.6: Percentage of population using social networks in North America, 2009-15 38
Figure 2.7: Social network overview for the US 39
Figure 2.8: Social network overview for Canada 40
Figure 2.9: Social network growth in Western Europe (users, m), 2009-15 42
Figure 2.10: Percentage of population using social networks in Western Europe, 2009-15 43
Figure 2.11: Social network overview for the UK 45
Figure 2.12: Social network overview for Germany 47
Figure 2.13: Social network overview for France 48
Figure 2.14: Social network overview for Italy 50
Figure 2.15: Social network overview for Spain 52
Figure 2.16: Social network growth in Central and Eastern Europe (users, m), 2009-15 54
Figure 2.17: Percentage of population using social networks in Central and Eastern Europe, 2009- 15 54
Figure 2.18: Social network overview for Russia 55
Figure 2.19: Social network growth in Central and South America (users, m), 2009-15 57
Figure 2.20: Percentage of population using social networks in Central and South America 2009-15 58
Figure 2.21: Social network overview for Brazil 59
Figure 2.22: Social network overview for Mexico 60
Figure 2.23: Social network growth in Asia (users, m), 2009-15 62
Figure 2.24: Percentage of population using social networks in Asia, 2009-15 63
Figure 2.25: Social network overview for China 64
Figure 2.26: Social network overview for Japan 66
Figure 2.27: Social network overview for South Korea 67
Figure 2.28: Social network overview for India 69
Figure 2.29: Social network overview for Indonesia 71
Figure 2.30: Social network overview for the Philippines 73
Figure 2.31: Social network overview for Singapore 74
Figure 2.32: Social network overview for Australia 76
Figure 2.33: Social network overview for South Africa 77
Figure 2.34: Social network overview for Turkey 78
Figure 2.35: PEST analysis for the social networking market 80
Figure 2.36: Social network growth by region (users, m), 2009-15 82
Figure 2.37: Top 10 national social networking markets by unique user numbers, 2015 83
Figure 3.38: Leading global social networks by unique user numbers (m), end 2009 89
Figure 3.39: Leading global social networks by regular unique user numbers (m), end 2009 92
Figure 3.40: Major social networks’ regular users as a proportion of total unique users (%), end 2009 94
Figure 3.41: Social networks’ monetization strategy, 2010 100
Figure 3.42: Social network user category / segment ownership in the US 102
Figure 4.43: Top 7 national social networking markets by consumer spending reach, 2015 112
Figure 4.44: Global social networking direct revenues by segment ($bn), 2010-15 115
Figure 4.45: Global social networking ARPU by segment ($), 2010-15 116
Figure 4.46: Top 10 national markets by direct social networking revenue ($bn), 2015 117
Figure 4.47: Top 10 national markets by direct social networking ARPU ($), 2015 119
Figure 4.48: Global direct social gaming revenues ($bn), 2010-15 125
List of Tables
Table 2.1: Social network user growth (users m), 2009-15 by region 31
Table 2.2: Proportion of population using social networks by region (%), 2009-15 34
Table 2.3: Social network market scale and growth in the US, 2009-15 39
Table 2.4: Social network market scale and growth in Canada, 2009-15 41
Table 2.5: Facebook user reach and market rank in Western Europe, December 2009 43
Table 2.6: Social network market scale and growth in the UK, 2009-15 45
Table 2.7: Social network market scale and growth in Germany, 2009-15 47
Table 2.8: Social network market scale and growth in France, 2009-15 49
Table 2.9: Social network market scale and growth in Italy, 2009-15 51
Table 2.10: Social network market scale and growth in Spain, 2009-15 52
Table 2.11: Social network market scale and growth in Russia, 2009-15 55
Table 2.12: Social network market scale and growth in Brazil, 2009-15 59
Table 2.13: Social network market scale and growth in Mexico, 2009-15 61
Table 2.14: Social network market scale and growth in China, 2009-15 65
Table 2.15: Social network market scale and growth in Japan, 2009-15 66
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