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March 30, 2011

Average Revenue Per User in Social Networks Set To Rise

Deloitte’s view is that the advertising revenues from social networks in 2011 are likely to be very significant in absolute terms: total industry revenues of$ 5 billion dollars and year-over-year growth of 40 percent

Worldwide spending on social networks will reach almost $6 billion this year, amounting to $3.1 billion in the US and $2.9 billion in international markets.According to eMarketer forecasts that marketers will spend $4 billion worldwide on Facebook in 2011, with $2.2 billion of that in the US. The company will receive 68% of all social network ad spending worldwide. In the US, it will garner 71% of social network spending and 7.7% of total US online ad spending.

Average Revenue Per User for SocNets on the Rise

The average revenue per user of social networks should reach $4 this year. Social network advertising average revenue per user will approach $3.50, according to a new white paper from Deloitte. These figures are an improvement from estimates of more than $3.50 total average revenue per user and $3 advertising average revenue per user for 2010, as well as hard figures of a little more than $3 total average revenue per user and about $2.50 advertising average revenue per user for 2009.

Deloitte estimates worldwide social network membership will reach about 1 billion this year, meaning total social network average revenue per user 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.

How ARPU( Average Revenue per Users ) works
For example :Facebook '09 revenue neared $800 million.
The company started 2009 with the January announcement that it had reached 150 million users. By December, that number had swelled to 350 million.
ARPU = 800/350 = $2.3