Sunday, May 8, 2011

Social Media Ad Spending to Reach $8.3 Billion in 2015

Social media advertising revenues will grow from $2.1 billion in 2010 to $8.3 billion in 2015, representing a compound annual growth rate of 31.6 percent, according to BIA/Kelsey’s U.S. Local Media Annual Forecast (2010-2015).
BIA/Kelsey, adviser to companies in the local media space, defines social media advertising as money spent on advertising formats across social networks. Currently, the predominant ad format is display, spending on which the firm expects will increase from $2.1 billion in 2010 to $7.7 billion in 2015 (CAGR: 30.4 percent). Though revenues for non-display ad formats, such as Twitter’s “promoted products,” are minimal at present, BIA/Kelsey anticipates there will be a number of format developments beyond display, and expects the social non-display segment to grow from zero in 2010 to $600 million in 2015 (CAGR: 65 percent).
“It’s no surprise that Facebook commands a dominant share of all social ad impressions served and ad revenues generated,” said Jed Williams, analyst and program director of BIA/Kelsey’s Social Local Media practice. “As the social market leader, it already serves the most display ad impressions of any digital company, surpassing both Yahoo and Google. We fully expect Facebook to increase both impression share and ad revenue, as buyer awareness accelerates and creative formatting and targeting improve to optimize performance.”
BIA/Kelsey’s definition of social media advertising does not encompass virtual goods and rewards, social gaming, social commerce or social marketing.
“Over the next few years, social media factors will become a core element of various ad networks, which will in turn drive increased advertiser spending and innovation,” said Andrew Shotland, associate program director, Social Local Media and proprietor of The market is ripe for a ‘social AdSense’ and we expect to see a number of players pushing this model in the future.”