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US social advertising revenues will grow from $4.7 billion in 2012 to $11.0 billion in 2017—a compound annual growth rate (CAGR) of 18.6%—while locally targeted social ad revenues are projected to grow at a 26.4% CAGR, from $1.12 billion in 2012 to $3.62 billion in 2017, according to a forecast by BIA/Kelsey, which advises companies in the local media industry.

BIA/Kelsey expects social advertising's local penetration to steadily increase as social networks continually improve the ease of onboarding, local targeting, and campaign management both for brands and for small-to-midsize businesses.

Below, additional details about social advertising from BIA/Kelsey's US Local Media Forecast (2012-2017).

Display and Native Social Ad Spend

Display remains the dominant social ad unit, although native ad formats such as Facebook's Sponsored Stories and Twitter's Promoted Tweets require rethinking of traditional display to optimize social campaigns, especially on mobile platforms, BIA/Kelsey said.

US native social advertising revenues, spurred primarily by Facebook Sponsored Stories and Twitter Promoted Tweets, are forecast to grow from $1.63 billion in 2012 to $4.57 billion in 2017—a CAGR of 22.9%.

Desktop and Mobile Social Ad Spend

Also driven by Facebook and Twitter, US social mobile ad revenues approached $600 million in 2012 and are expected to grow to $2.18 billion in 2017—a CAGR of 29.9%.

"Social networks are evolving their ad products and features to improve performance," said Jed Williams, director of consulting and senior analyst, BIA/Kelsey. "Native social formats, including video, and mobile-social advertising will be the principal market growth drivers."

BIA/Kelsey custom advisory service clients can log into the client resource center to download the full US Social Local Media forecast.

Forecast Methodology and Definitions

BIA/Kelsey's Annual US Local Media Forecast (2012-2017) draws from multiple sources, including proprietary data; company, industry, and country information in the public domain; as well as discussions with clients and non-clients about the direction and pace of development in the local media marketplace. The forecast is issued annually each spring and updated in the fall.

BIA/Kelsey defines the local media advertising marketplace as those media that provide local audiences to all types of advertisers.

BIA/Kelsey defines social media advertising as money spent on advertising formats across social networks. Currently, the predominant ad format is display, though native advertising formats— branded content integrated directly within a social network experience (e.g., the News Feed or content stream)—are emerging as display alternatives.

BIA/Kelsey's definition of social advertising does not include revenues derived from virtual currency, social marketing/measurement platforms and services, or social commerce.

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ABOUT THE AUTHOR
image of Vahe Habeshian

Vahe Habeshian is the director of publications at MarketingProfs and a longtime editor. Reach him via vahe@marketingprofs.com.

LinkedIn: Vahe Habeshian

Twitter: @habesh