BIA/Kelsey, a leading media analysis and consultancy firm, forecasts that social media advertising revenue in the U.S. will grow from $4.6 billion to $9.2 billion in the next four years – that equates to a compound annual growth rate of 19.2%.
“The continued development of native ads, such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, and the acceleration of mobile monetization will be the primary drivers of social advertising growth through 2016”, said Jed Williams of BIA/Kelsey, adding that 2012 was the year of social advertising’s “coming of age”.
According to Dan Greenberg, CEO of Sharethrough, ‘native advertising’ is “a form of media that’s built into the actual visual design and where the ads are part of the content.” The revenue from ‘native advertising’ is predicted to grow from $1.5 billion to $3.9 billion by 2016.
There will also be an increase in the revenue from other forms of social media advertising: the revenue from social display advertising, such as the banners on YouTube, will increase at a compound annual growth rate of 15.2% from $3 billion to $5.4 billion.
Mobile advertising is expected to increase 300% over the next four years, from $500 million to 1.5 billion. Jed Williams admits that they are “clearly placing a bet that mobile ads will perform. Obviously, mobile ad economies are not very good, but as demand goes up, hopefully the prices will go up.”
Are you surprised by BIA/Kelsey’s findings?
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