The firm’s latest forecast indicates native social ad revenues are growing at a significantly faster pace than social display, the predominant social ad category
CHANTILLY, Va. (Dec. 18, 2013) – The fall update to BIA/Kelsey’s U.S. Social Local Media Forecast indicates native social advertising is growing significantly faster than social display, the predominant social ad format. The native category experienced a 77 percent jump in revenues this year, from $1.4 billion in 2012 to $2.4 billion, driven by the surge in social media activity across mobile platforms, where native is the preferred format.
According to the forecast, social display ad revenues in the U.S. will grow from $4.3 billion in 2013 to $6.8 billion in 2017, a 12.6 percent compounded annual growth rate (CAGR). During the same period, U.S. native social advertising, spurred primarily by Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, will more than double, from $2.4 billion to nearly $5 billion, a 20.3 percent CAGR.
“Display remains the most prevalent form of social advertising throughout our forecast,” said Jed Williams, VP, consulting, BIA/Kelsey. “At the same time, native advertising formats are quickly emerging as alternatives to display that can generate better engagement and performance. The rapid growth in native is further accelerated by the widespread usage of social networks on mobile devices.”
Also driven by Facebook and Twitter, U.S. social mobile ad revenues are expected to grow from $1.6 billion in 2013 (up 250 percent from 2012) to $3.5 billion by 2017, a 21.3 percent CAGR. Mobile represents the fastest-growing social advertising segment.
BIA/Kelsey projects total U.S. social media advertising revenues will grow from $6.7 billion in 2013 to $11.9 billion in 2017, representing a CAGR of 15.5 percent. Locally targeted social advertising will grow at a 22.6 percent CAGR, from $1.7 billion in 2013 to $3.9 billion in 2017.
New in this forecast update, which is published for clients of BIA/Kelsey’s custom advisory services, is a breakout of social ad revenue share by company (Facebook, LinkedIn, Twitter, YouTube and others) for 2013 and 2017. For information on gaining access to the forecast as a BIA/Kelsey client, or for details on purchasing the forecast, contact Steve Passwaiter, VP, business development, at firstname.lastname@example.org or (703) 818-2425.
Defining Social Advertising
BIA/Kelsey defines social media advertising as money spent on advertising formats across social networks. Social advertising is included in BIA/Kelsey’s display revenue forecast, which falls within the online/interactive advertising category. BIA/Kelsey specifically delineates native social advertising as branded content integrated directly within a social network’s user experience (i.e., the newsfeed or content stream). These integrated, advertorial qualities differentiate native ads from traditional display. BIA/Kelsey’s definition of social advertising does not include revenues derived from virtual currency, social marketing/measurement platforms and services or social commerce.
About the BIA/Kelsey U.S. Local Media Forecast
The U.S. Social Local Media Forecast is part of BIA/Kelsey’s Annual U.S. Local Media Forecast (2012-2017). The forecast draws from proprietary data; company, industry and country information in the public domain; and 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, updated in the fall, and published for clients of the firm’s custom advisory services. More information is available online at: http://www.biakelsey.com/Research-and-Analysis/Forecasts/US-Local-Media-Forecast/.
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey). Stay connected by subscribing to the firm’s bi-monthly newsletter.
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