Growing advertising spending and disposable income will benefit the industry
New York, NY (PRWEB) February 25, 2015
The Social Networking Sites(SNS) industry is benefiting from an increasing consumer base, as more Americans conduct services online. Additionally, SNS are attracting a growing share of advertising revenue, as they measure the effectiveness of advertising and leverage significant consumer information to accurately target such advertising and boost its effectiveness. As the industry leverages its consumer information, revenue is expected to grow in 2015, due to increasing disposable income, which is expected to boost consumer spending on discretionary services like subscriptions or add-ons.
Five years ago, SNS were much smaller and unable to monetize their services. During this time, the industry invested significantly in targeted advertising services and consumer controls. As the number of subscribers has grown, the amount of revenue per subscriber increased and costs per subscriber contracted. Industry profit, as measured by earnings before interest and taxes, is expected to expand in 2015, with major and smaller companies having a wide range of margins.
Despite high merger and acquisition activity, the number of enterprises is expected to grow, as opportunities for growth present themselves on new platforms and devices. As more SNS develop ways to leverage their consumer base, they will generate higher consumer and advertising revenue. Growing advertising spending and rising disposable income levels are expected to benefit the industry. However, the industry will be growing from a higher base in the next five years, and SNS are expected to focus on expansion in Asia and Latin America. Consequently, revenue is projected to grow at a slower average in 2020.
The vast amount of personal information shared on SNS has generated privacy concerns, which have been worsened by revelations that the government has been tracking personal information on these networks. The growing practice of data licensing, through which operators make their data available to industry partners, is triggering concerns among users. This growing crisis of confidence is expected to compel industry players to strengthen their privacy protection regulations in the coming years.
For more information, visit IBISWorld’s Social Networking Sites (SNS) in the US industry report page.
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IBISWorld industry Report Key Topics
The Social Networking Sites (SNS) industry includes social networking website publishers and developers. The industry does not include general publishers of internet content, online dating websites, online forums, online video games or other social game developers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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