Small Business News

Social Ad Revenue Projected To Have Big Growth

BIA/Kelsey released its latest U.S. Social Local Media Forecast looking at 2013 – 2018. The firm expects social media ad revenues in the country to grow from $5.1 billion in 2013 to $15 billion in 2018. This would represent a compound annual growth rate of 24%.

According to the report, 2014 is seeing the greatest year-over-year increase in social media ad revenues with a projected $8.4 billion. The firm chalks this up to increases in mobile and native advertising spend.

Social display ad revenues are expected to grow from $3.3 billion in 2013 to $5.6 billion in 2018 while native social advertising is expected to grow from $1.8 billion in 2013 to a whopping $9.4 billion in 2018 largely thanks to Facebook’s News Feed ads and Twitter’s promoted tweets. The firm expects native social advertising to eclipse social display for the first time next year.

“We were initially skeptical about the social-mobile market’s ability to capture optimal wallet share because of mobile’s limitations, such as smaller screen size, limited ad inventory and static creative,” said Jed Williams, VP, consulting at BIA/Kelsey. “Over the past year, however, Facebook, Twitter and other networks have generated dramatic revenue growth, primarily as a function of mobile ad acceleration and largely through natively integrated mobile ad formats. We expect this growth to continue throughout the forecast period.”

“While social networks are enhancing the geotargeting capabilities of their ad platforms, local targeting is still an emerging capability,” said Williams. “As social usage further migrates to mobile platforms, the need for locally targeted messages and offers that leverage mobile’s unique capabilities will expand. We expect social local ad spend to increase steadily through 2018, as SMBs better leverage multi- and micro-targeting to optimize campaigns, and national brands drive more traffic to individual store locations and target consumers with more personalized offers.”

The firm expects locally targeted advertising in the U.S. to grow from $1.3 billion in 2013 to $5.2 billion in 2018.

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