Amid social media blitz, a warning
Gartner Inc. predicted social media advertising spending will grow by half next year ”“ but also sees a bubble bursting for investment in social media companies.
Gartner issued its prediction to close out a year in which Gov. Dannel P. Malloy vowed to reinvigorate Connecticut”™s climate for spawning startups, with digital media an obvious focus for financiers, and as organizers created the Stamford Innovation Center at the city”™s Old Town Hall. At the center, there has been an early focus on new media development and a goal of linking up with an emerging curriculum on the subject at the University of Connecticut Stamford a few blocks away.
Connecticut Innovations Inc., a venture capital fund originally created by the state, backed multiple new media companies in 2011, including iDevices L.L.C. in Canton, whose iGrill allows iPhone and iPad owners to monitor temperatures of food being cooked from a distance.
In an annual information technology forecast released at the start of December, analysts with Stamford-based Garter predicted the super-heated investment market for consumer social media will cool within just two years ”“ despite social media still representing an immature market today with businesses very much in an experimental phase.
“Social (networking) is going to have its ups and downs, but will continue to become a major issue for the use of computing technology as life becomes more ”˜social,”™” said Gartner fellow Daryl Plummer, in a podcast covering Gartner”™s predictions.
Vendors are competing with each other at a rate and pace that are unusually aggressive, even in the technology market according to Gartner. The net result is a large crop of vendors with overlapping features competing for a finite audience.
Still, Gartner says social media is transforming how people collaborate with each other inside organizations. By 2015, Gartner adds, mobile application development for smartphones and tablets will outnumber traditional PC development by a ratio of 4-to-1. By comparison, Gartner estimated that app development projects targeting PCs this year were roughly even with mobile development. Gartner has scheduled webinars for Dec. 21 to review its predictions for social networking and other information technology platforms.
Only last month, Pitney Bowes Inc. released survey results suggesting that social media platforms represent a limited return on investment for companies attempting to bring existing customers back to checkout lines.
Gartner expects social media advertising to increase by nearly 50 percent next year, as marketers transition from one-time placement of ads to a model of ongoing engagement with customers, according to Neha Gupta, a senior research analyst at Gartner.
“This is mainly because social networking sites ”¦ are able to unlock the interconnected data structures of users ”“ mapping lists of friends, their comments and messages, photos and all their social connections, contact information and associated media,” Gupta said, in a written statement. “From a revenue perspective, the social media market is still in its early stages, even though it has a large number of users who, in some cases, are exhibiting increasingly mature usage patterns. Market participants need to build new business models to tap into this increased usage and users”™ increased level of engagement.”