Deloitte predicted that social networks this year will surpass 1 billion unique members and deliver more than 2 trillion ads. However, according to the company, ad revenue of about $5 billion represents less than 1% of global ad spending. In addition, rates measured by cost-per-thousand impressions (CPM) will remain low, and subscriber growth rates may soon stagnate.
The company said that extracting useful insights from user data was imposing a drag on CPMs, and that “the billions of stated 'likes' may not all necessarily signal an intent to purchase.”
Deloitte added that social networks may generate better revenue as payment platforms, or as a “blended e-commerce department store model,” charging commissions on online sales.