U.S. Social Ad Revenue to Hit $11 Billion by 2017

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Annual U.S. social ad revenue is expected to reach $11 billion by 2017, according to a recent study by BIA/Kelsey.

The jump would represent a growth rate of over 18 percent over the next five years. BIA/Kelsey projects that video and mobile social ads will be the prime motivators for the future growth.

"Social networks are evolving their ad products and features to improve performance," said director of consulting and senior analyst at BIA/Kelsey Jed Williams.

"Native social formats, including video and mobile-social advertising will be the principal market growth drivers."

BIA/Kelsey says that over the course of the coming years social networks will improve their social ad offerings, leading to an increase in revenue. The company projects that local ad targeting and campaign management will continue to improve moving into 2017.

According to the study, campaign options such as Twitter Promoted Tweets and Facebook Sponsored Stories will lead to advertisers rethinking their campaign strategies. BIA/Kelsey's study estimates that native social advertising revenues will grow over $3 billion by 2017.

Mobile social advertising is also expected to become a major growth sector. BIA/Kelsey says that the frequent use of Facebook and Twitter on mobile devices will lead the sector to over $2 billion in revenue by 2017.

The report of growth for mobile social advertising revenue comes as Facebook begins to roll out its Facebook Home app. The Android software allows users to skin their smartphone with a Facebook overlay that puts social networking front and center.

BIA/Kelsey's projections come from a variety of proprietary and client information. It is part of the firm's biannual Local Media Forecast. The study is released each spring and updated during the fall.

The company focuses on the local media space. BIA/Kelsey helps clients by offering consulting, valuation, research, and forecasting services.