So the question inevitably is just how big is the the future of online, real-time social communities. “Really big in 2013″ is the the sort of bar napkin answer. Combine the opportunities of social media with premium content and digital goods to see that this new offering is in the sweet spot of online growth (outside of Search) in next 3 years. More sizing on the overall online market in next few years data below.
Online market continues to expand and will leap into 2013 with mobile, social net and MMO driving innovation online. Search will continue to eat up traditional ad spends.
Key Notes on 2013 Forecasts:
* Mobile web is finally here? maybe! 2013 Gartner guess there will be more mobiles than pc’s by 2013. Screens will still of course be small, but fast access to net and better processors will allow new user experiences and constant contact with online services/content. Looks like a battle for iTunes massive/dominant marketshare from Nokia, Motorola is on the way also?
* Advertising is diverting more and more from traditional to online–50% seems to be search related. Online advertisers like the transparency to link spend to customer transactions. But– costs for search are growing rapidly (great for Google of course). Display in rich media/video also is hot for advertisers to get above the noise and have mindshare for early adopters.
* Premium content — via iTunes and paywall are growing rapidly. And high margin (Activision sets 30% margin targets).
* 600 million PCs will be able to play MMOs by 2013 — making PC the dominant access point (source PCGA) despite Mobile growth? Clearly these will need to co-exist and deliver a unified experience across brand.
Growth in advertising/interactive spend online
*$36.7 Billion 2013 up from $15.2 Billion 2009 (BIA/Kelsey via techcrunchies) meanwhile traditional advertising will decrease from $115 Billion 2009 to $108 Billion 2013.
* 2013 $14.3 Billion (from 7.8 2009) in US Display ads = rich media and video pre/post > source Forrester.
* 2013 $2.2 Billion social media (from $0.75 billion in 2009) > source Forrester.
iTunes/other app and premium content sales
* $29.5 Billion in 2013 up from $6.2 Billion in 2009.
* 87% of downloads in 2013 still will be free suggesting the “freemium” model is still best way to generate premium content sales as well as generate mobile ad revenues
Mobile Ads
* More mobiles than PCs by 2013 (1.82 vs 1.78 billion) Gartner.
* $3.1 Billion in 2013 (Kelsey via Clickz) of which $2.3 Billion will be search.
Sales for Digital Goods
* $6 Billion by 2013 (source Piper Jaffray via emarketer). Report also notes that revenues in virtual worlds are dropping, while increasing in online social games
General Trends
* Highlights from Comscore Report via Marketingcharts: on reach/clickthrough: “Even as new capabilities emerge that leverage the “social” value of the medium, this channel already delivers substantial reach for ad campaigns and despite low click-through rates, there is measurable view-through value from these ads.”
* Olympics Viewers Multi-task(Nielsen via marketingcharts)= twitter and facebook while watching events.
* Top Ten Freemium conversions to Paid (source techcrunchies) = 1. Contact members, 2. Access to experts, 3. Storage, 4. Ad-free browsing, 5. Custom domain, 6. Enhanced gameplay, 7. Enhanced support, 8. Member visibility, 9. Networking, 10. Private groups
* Activision Blizzard CEO remarking on $4.28 Billion in 2009 sales from titles like World of Warcraft, Guitar Hero: “Despite these challenging times, in 2010 we remain focused on expanding operating margins by growing our high-margin digital/online revenues…we expect to deliver a year of record net earnings and operating margins and are taking another step towards our long-term objective of operating margins of 30 per cent or more.”
