Social Ad Revenues Flowing
BIA/Kelsey is projecting that revenues driven from social media advertising in the U.S. could reach $15 billion by 2018.
“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.”
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.