BIA/Kelsey Sees Social Media Ad Revenues Growing 24% Through 2018
May 15, 2014 at 3:59 AM (PT)
BIA/KELSEY has released findings from their U.S. Local Media Forecast, 2013-2018: Social Advertising Edition. Some of the highlights:
- BIA/KELSEY projects U.S. social advertising revenues to grow from $5.1 billion in 2013 to $15.0 billion in 2018, a 24.0% CAGR.
- Native social advertising, spurred primarily by FACEBOOK’s News Feed ads and TWITTER’s Promoted Tweets, will grow from $1.8 billion in the U.S. in 2013 to $9.4 billion in 2018, a 38.6% CAGR. Native social advertising is growing significantly faster than social display and will eclipse display revenues next year.
- Also driven by FACEBOOK and TWITTER, U.S. social mobile ad revenues surpassed $1.5 billion in 2013, and will subsequently grow to $7.6 billion by 2018, a 38.3% CAGR.
- Locally-targeted social advertising will grow at a 31.6% CAGR, from $1.3 billion in 2013 to $5.2 billion in 2018.
Social Advertising Forecast: Native Advertising Surges
Again in this forecast, BIA/KELSEY estimates native social advertising. Native is defined as branded content integrated directly within a social network’s organic user experience (i.e., the FACEBOOK newsfeed or TWITTER content stream), rather than positioned in specifically-designated advertising real estate.
Native social advertising, spurred primarily by FACEBOOK’s News Feed ads and TWITTER’s Promoted Tweets, will grow from $1.8 billion in the U.S. in 2013 to $9.4 billion in 2018. Native’s 38.6% CAGR surpasses the 24.0% CAGR for the overall U.S. social advertising market and more than triples the 11.3% CAGR for social display.
Native social advertising growth will be driven by the higher premiums that these units command, especially on mobile platforms, where native has become the primary format. In FACEBOOK’s case, BIA/KELSEY projects that News Feed ads will comprise nearly 63% of total revenues in 2014 and will exceed 82% percent by 2018.
Social Advertising Forecast: Mobile Monetization Accelerates
This forecast also estimates social advertising revenues by platform: desktop vs. mobile. Driven by FACEBOOK and TWITTER, U.S. social mobile ad revenues eclipsed $1.5 billion in 2013. They will reach $7.6 billion by 2018 -- a 38.3% CAGR. In 2018, social mobile ad revenues will surpass desktop for the first time.
Social-mobile advertising will accelerate due to two predominant forces:
- Rapid social-mobile consumer usage growth
- Deep integration of native ads units on the platform (native is already the primary ad unit for top U.S. social networks)
BIA/KELSEY was initially skeptical about the social-mobile market’s ability to capture optimal wallet share because of mobile’s limitations. These included smaller screen size, limited ad inventory and static creative. 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. They expect this growth to continue over the duration of the forecast.