Sizing Up the Social Media Software Market

As part of a recent interview process, I was asked to perform a series of projects as ‘homework’ to demonstrate my thinking, writing and presentation skills.  One of the projects was to create an estimate on the size of the social media software market.  While I didn’t get the job, the good news is that I am not going to let my research efforts gather dust or sit on my laptop in perpetuity.

I analyzed the social media software market size along two dimensions – types of buyers and types of software providers.  For buyers, I used the categories of large business (> 500 employees), medium business (100-500 employees), small business (< 100 employees), non-profits, hobbyists and special interest, and individual home market.  For types of software providers, I used White Label (average solution cost of $30,000), Budget (average solution cost of $500), Open Source and Free.  As far as the providers, here are representative companies in each category:

  • White Label – the usual suspects including Awareness, HiveLive, Jive, KickApps, Leverage, Lithium, Mzinga, Pluck, Telligent, etc.
  • Budget – vBulletin, Boonex, Ning, etc.
  • Open Source – Drupal, Joomla, WordPress, etc.
  • Free – Ning, PBWiki and a whole host of other providers

Conclusion – the total US social media software space is estimated at $600 million in revenue and 1.26 million potential customers.  The Global market likely adds 50% to totals – $900 million in revenue and 2.0 million prospects, and I estimated that 15-20% of overall market is currently penetrated.

Here are a couple of the graphs I created to visually display the results:

Social Media Software - Revenue By Segment (Tom Humbarger)

Social Media Software - Revenue By Segment ( per Tom Humbarger)

Total Social Media Software Market by Buyer Category

Total Social Media Software Market by Buyer Category

Approach – here is a summary of the approach I used to develop the sizing analysis:

  • Statistics – Obtained business stats from US census and nonprofits stats from National Center for Charitable Statistics; used  best guestimates for hobbyists and home market
  • Category interest – Estimated % interest in each category between large, medium and small business, nonprofits, special interest and hobbyists, and individuals
  • Segment interest – Estimated segment % breakdown between White Label, Budget, Open Source and Free

I was not able to locate any published market sizing numbers for the Social Media software market – so I was unable to determine if I was in the ball park according to other numbers.  Plus, my analysis takes a quick-n-dirty approach and I would definitely validate it further if I were ‘getting paid’ for the assignment.

So, does anyone agree or disagree with the numbers or my approach?  I welcome any and all comments, suggestions and rebuttals.

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BTW, if you are really interested in the detailed approach, a picture of my detailed spreadsheet is copied below.  If you send me an email, I would be more than happy to send you a copy of the Excel file.

Social Media Software - Market Sizing Details

Social Media Software - Market Sizing Details

10 thoughts on “Sizing Up the Social Media Software Market

  1. Wow, a piece of great work!
    I was looking for a source with market size but even didn’t expect to be leaded to such a sophisticated and comprehensive one! Thank you very much!

    Can you send me a copy of the spreadsheet?

    Thanks,
    Israel

  2. Hi TOM,

    Very structured methodology and interesting data, I am looking to do a similar sizing for here in Canada, your sheet and any other info you have would be useful.

    Thanks,
    Parth

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