Within the next five years, U.S. social advertising revenues will reach $15 billion, with native and mobile leading the way.
Driven by the growth of mobile and native advertising, U.S. social media advertising revenues will increase from $5.1 billion in 2013 to $15 billion in 2018, according to BIA/Kelsey.
In its newly released U.S. Social Local Media Forecast (2013-2018), BIA/Kelsey defines social media advertising as money spent on ad formats across social networks. The company predicts that these ad revenues will grow to $8.4 billion in 2014, representing the greatest year-over-year jump in the five-year forecast period.
Meanwhile, native social advertising is growing faster than social display, notes the report. And in 2015, it will surpass social display for the first time.
U.S. native social advertising, primarily driven by Facebook's News Feed ads and Twitter's Promoted Tweets, will surge from $1.8 billion in 2013 to $9.4 billion in 2018, according to the forecast. This represents a compound annual growth rate (CAGR) of 38.6 percent. In comparison, social display ad revenues will see a modest increase, from $3.3 billion in 2013 to $5.6 billion in 2018 (CAGR: 11.3 percent).
"Native social advertising is anything integrated within a social network's user experience," says Mark Fratrik, vice president and chief economist at BIA/Kelsey, commenting on the findings. "Facebook's News Feed and Twitter's Promoted Tweets are becoming very successful. And social sites are able to charge higher advertising prices for native advertising, because people know they have a great impact."
A look at two different platforms - desktop and mobile - reveals that by 2018, U.S. social mobile ad revenues will climb to $7.6 billion by 2018 (CAGR: 38.3 percent), and exceed social desktop for the first time.
This trend is down to a striking revenue growth in Facebook, Twitter, and other social media channels in the past few years, primarily through mobile, Fratrik explains. "Young people check Facebook pages and Twitter feeds every few hours," he tells ClickZ. "Based on every quarterly report we get from Facebook, we find that this social network has successfully moved into mobile area."
Fratrik points out that marketers and advertisers are continuing to transition from traditional media to online and mobile. "We expect that growth to continue," he adds. "In our research, we see many marketers are incorporating successfully social and online digital sites into their campaigns."
The full report is available for BIA/Kelsey clients only. You can request the report here.
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Yuyu Chen is an Editorial Intern at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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September 23, 2014