U.S. Social Media Local Ads To Generate $3.1 Billion In 2016

Social media U.S. advertising revenue will reach $9.8 billion in 2016, up from $3.8 billion in 2011, according to BIA/Kelsey's U.S. Local Media Forecast: 2011-2016. The uptick represents a compound annual growth rate of 21%, rising to $4.8 billion in 2012, $5.9 billion in 2013, $7.0 billion in 2014, and $8.3 billion in 2015.

BIA/Kelsey expects the local media segment of U.S. social media advertising revenue to grow from $840 million in 2011 to $3.1 billion in 2016, a CAGR of 29.8%. This means spending will rise from $1.2 billion in 2012 to $1.5 billion in 2013 to $2 billion in 2014 and $2.5 billion in 2015.

While the BIA/Kelsey report forecasts that companies will spend billions on social media ads, some across corporate America might think twice. The Wall Street Journal reported Tuesday that General Motors will stop buying ads on Facebook, but will continue to market through pages on the social site -- a strategy with little or no cost.

BIA/Kelsey defines social media advertising as money spent on advertising formats across social networks, including formats such as Facebook's Ads and Sponsored Stories and Twitter's Promoted Tweets. Spending on display-type social ads will rise from $3.6 billion in 2011 to $9.2 billion in 2016, according to the forecast. This typically means smaller neighborhood businesses.

BIA/Kelsey expects the social non-display segment to grow from $140 million in 2010 to $630 million in 2016.

Contributing this year to the increase will be spending on political campaigns. Data firm comScore released a study in April citing that U.S. President Barack Obama's campaign outspent Mitt Romney by a ratio of 10 to 1 during the past six months, and that social media has emerged as a means of facilitating political themes much more rapidly.

Social media serves to generate word of mouth by giving voters a way to more actively engage in political discussion, debates and issues through a "digital watercooler." For example, during the six months prior to the release of the comScore study, presidential nominee Mitt Romney advertised mostly on Facebook, with 58.2% of its ads distributed through the social network, reaching thousands instantaneously.

2 comments about "U.S. Social Media Local Ads To Generate $3.1 Billion In 2016".
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  1. Douglas Ferguson from College of Charleston, May 16, 2012 at 10:19 a.m.

    Wrong headline, although someone might correct it from 3.1 to 9.8 by the time you read this.

  2. Laurie Sullivan from lauriesullivan, May 19, 2012 at 2:24 p.m.

    "BIA/Kelsey forecasts mobile local search revenues to grow at a compound annual growth rate of 160.4 percent, from $400 million in 2011 to $3.2 billion in 2016." ($3.1 billion and some change.)

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