social media market
DESCRIPTION
State of Social Media Industry Number of worldwide internet users now exceeds 2.64 billion, representing a global penetration of 37% Rapidly expanding social network audiences in the emerging markets of Asia-Pacific and the Middle East & Africa will be huge drivers of social user growth Social media industry is both a mature and an emerging market: Mature in term of user size – subscriber growth slowing down In terms or revenue social media companies are still in early stages, with most still looking for creative ways to monetize servicesTRANSCRIPT
Social MediaSector Overview
February 2014
2
Contents
1. Industry Overview
2. Global M&A Statistics
3
6,337 employe
es
$61.48 share
price
24m Britons log
on daily
556m access via
smartphone or
tablet
44
+28.62%
+9.65%
6 Feb 2014:Twitter shares
plummet by 24% after it reported slower growth in
numbers
5
millions 2011 2012 2013 2014 2015 2016 2017CAGR
14-17
UK 27 30 32 34 35 36 37 2.7%
Western Europe (excl. UK) 115 130 142 152 160 166 172 4.2%
Central & Eastern Europe 137 155 174 190 203 213 223 5.6%
Asia Pacific 502 633 777 907 1,018 1,130 1,232 10.7%
Latin America 152 183 217 247 280 303 324 9.6%
Middle East & Africa 123 164 210 249 287 325 358 12.9%
North America 164 174 181 188 194 199 204 2.7%
Worldwide 1,220 1,468 1,733 1,965 2,177 2,372 2,550 9.1%
% internet users 58.2% 63.1% 67.7% 71.1% 74.1% 76.6% 78.7%
% population 17.6% 20.9% 24.4% 27.4% 30.0% 32.4% 34.5%
• Number of worldwide internet users now exceeds 2.64 billion, representing a global penetration of 37%
• Rapidly expanding social network audiences in the emerging markets of Asia-Pacific and the Middle East & Africa will be huge drivers of social user growth
• Social media industry is both a mature and an emerging market:
o Mature in term of user size – subscriber growth slowing down
o In terms or revenue social media companies are still in early stages, with most still looking for creative ways to monetize services
Social Media Industry Overview
State of Social Media Industry
Top Social Media Networking Sites (2013) Social Network Users Worldwide , 2011 - 2017
Social Network Penetration
Source: eMArketer, April 2013
+23%
% change in millions of active users between Q2 and Q4 2013
Source: eMArketer, April 2013
+9%
+6%
Number of users in billions
Source: GlobalwebIndex
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Rise of Social Media Advertising Spending
• Conservative estimates predict huge growth and increase in campaign spending
• North America clear market leader in social media advertising spending
• European social media marketing spend forecast to reach $3.3 billion in 2014
Global Social Media Advertising SpendingSummary
• Social media advertising spending has grown 53% YOY reaching £243 million in H12013 (IAB) CAGR 2
012-2015 =
30.9%
UK Social Media Advertising Spending
Social Media extends beyond sales and marketing – rise of the enterprise social network
Total 7,329 10,217 13,057 16,445
£243m
CAGR = 32.6%
CAGR = 31.0%
CAGR = 25.6%
CAGR = 37.5%
CAGR = 62.3%
Source: IAB UK
UK ~ $643m in 2013
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1. Difficulty measuring ROI and justifying efforts and resources
2. Lack of profits
3. Low barriers to entry
4. Channel in continuous change/improvement
5. Lack of control
6. Data Privacy
Challenges facing the Social Media Industry
• European initiative enabling anyone to delete their
personal details from online service providers
• Analysts predict that the new EU privacy legislation
could cut the predicted social media marketing spending
by more than €880m (Forrester)
• Britain seeks to opt out of Initiative
“Rights to be forgotten law”!“The full extent and implementation of the European privacy legislation is as yet uncertain, and the fractured manner in which such derivatives are applied across various European countries means that compliance costs for marketers will rise”
(James McDavid, Forrester)
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1. Investment in social media to become a
necessity, not a luxury
2. Rise of paid social advertising
3. Imaged-based content to drive social
media engagement
4. Increased mobile usage will be huge driver
for growth
5. New smaller, mobile apps and platforms
6. CRM connects with social media
Future of Social MediaSocial Media Marketing Trends for 2014
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Contents
approach
1. Social Media Market Landscape
2. Global M&A Statistics
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2012 M&A Deal Activity
Big year for social media – big multiples and headlines
Transactions in 2012 were focused on acquisition of developer teams and software and
platforms
Technology-based social media companies dominated deals
2012 deals of note include:
• Microsoft acquisition of Yammer, an enterprise social networking portal for $1.2billion
• Salesforce acquisition of BuddyMedia for $689m, a social enterprise software
• Google acquisition of Wildfire for $350million, a social marketing software developer
• Oracle acquisition of social marketing platform provider Virtue for $300m
• Facebook IPO, priced at $38 and raised a total of $16billion
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2013 Global M&A DealsInfographic
Geographical Split Subsector Split
Major Buyers
WPP
YahooMatch.com
BlueFocus
Publicis
Salesforce
5
2
22
21
1
1 1 1
By quarter
Deal type
10Q4
5
19
PE/VC backed deals
Cross border deals
South America4 deals
North America43 deals
Africa0 deals
Western Europe14 deals
UK6 deals
Eastern Europe2 deals
Canada4 deals
Middle East0 deals
APAC11 deals
Q1
26
Q3
18
Q2
26
Results Deals
Social Media Agency
Digital
AdTech
To the New
1
1
Amazon
Dentsu
Total deals = 80
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Selected Recent Deal Activity – Social Media
Date Buyer Target EV ($m) EV/REVEV/
EBITDADescription
Dec- 13 40.8 1.2xn.A
UK based social media agency
Dec- 13 n.a. n..a n.A Social media marketing firm based in Singapore
Oct- 13 35n.A n.A Provides social media advertisement creation and
related CRM SaaS
May -13 n.A n.A n.ASocial media agency based in Amsterdam
May- 13 1,100 84.6xn.A Provides a social networking service and an online
publishing platform
Apr- 13 n.a n.a n.A Operates and manages a micro-blogging website
Mar- 13 n.A n.a n.A A social blogging network
Mar- 13 150 n.a n.AA social reading portal which provides recommendation software and social networking portal based around books
Mar- 13 n.A n.A n.a Swiss-based social-monitoring analytics business
Feb- 13 c.80 n.a n.A Provides social media commentary analytics SaaS
Social Media Transactions
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