Report: U.S. Social Media Advertising Revenues to Reach $15B by 2018
May 15, 2014

In its latest U.S. Social Local Media Forecast (2013-2018), BIA/Kelsey projects total U.S. social media advertising revenues will grow from $5.1 billion in 2013 to $15 billion in 2018, representing a compound annual growth rate (CAGR) of 24 percent. This year represents the greatest year-over-year jump in social media ad revenues, growing to $8.4 billion in 2014, largely due to increases in mobile and native advertising. 

According to the forecast, U.S. social display ad revenues will grow from $3.3 billion in 2013 to $5.6 billion in 2018 (CAGR: 11.3 percent). During the same period, U.S. native social advertising, spurred primarily by Facebook’s News Feed ads and Twitter’s Promoted Tweets, will surge to $9.4 billion in 2018, up from $1.8 billion in 2013 (CAGR: 38.6 percent). In 2015, BIA/Kelsey expects native social advertising will eclipse social display for the first time.

The forecast also presents social advertising revenues by platform: desktop and mobile. Driven by Facebook and Twitter, U.S. social mobile ad revenues eclipsed $1.5 billion in 2013. U.S. social mobile ad revenues will reach $7.6 billion by 2018 (CAGR: 38.3 percent), surpassing social desktop for the first time.

“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, 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.”

BIA/Kelsey forecasts locally targeted social advertising in the U.S. to grow at a 31.6 percent CAGR, from $1.3 billion in 2013 to $5.2 billion in 2018.

“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.”




 
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