Mobile Marketer
Growth in mobile social and social native advertising are driving the largest year-over-year jump in social media ad revenues, with the total spend expected to be $8.4 billion in 2014, according to a new report out today from BIA/Kelsey.
In its latest U.S. Social Local Media Forecast, BIA/Kelsey forecasts that social media advertising revenues will reach $15 billion in 2018 for a compound annual growth rate of 24 percent. The growth rate is expected to be higher for native social advertising revenues, coming in at 38.6 percent; for social mobile, coming in at 38.3 percent, and for locally targeted social advertising, coming in at 31.6 percent.
“Looking at the overall social advertising forecast, we have raised that in total,” said Jed Williams, a senior analyst at BIA/Kelsey, Chantilly, VA. “Where we have raised that the most is in the out years of the forecast – we’ve raised it fairly significantly in 2017 and 2018 and we raised it slightly in 2014.
“The motive behind is that if you look at Facebook as a proxy to the overall social advertising marketplace, we have been encouraged and it has been eye-opening for us how they have continued to grow advertising revenue particularly U.S. advertising revenue, and what the drivers of that have been, particularly native and mobile,” he said.
“We still think there is a lot of growth there not just for Facebook in both of those areas and we see those areas as real drivers of growth across social media advertising. That growth is already occurring and it is occurring faster than we had anticipated six months of twelve months ago.”
Native advertising takes off
There has been a surge in native social advertising, driven by Facebook’s News Feed ads and Twitter’s Promoted Tweets. As a result, BIA/Kelsey predicts native social advertising will eclipse social display for the first time in 2015.
According to the forecast, social display ad revenues will grow from $3.3 billion in 2013 to $5.6 billion in 2018.
During the same period, native social advertising will surge to $9.4 billion in 2018, up from $1.8 billion in 2013.
On mobile, social ad revenues topped $1.5 billion in 2013 and will reach $7.6 billion by 2018, surpassing social desktop for the first time.
The report also forecasts that locally targeted social advertising will grow from $1.3 billion in 2013 to $5.2 billion in 2018.