Social Media Advertising May Outpace Internet Overall

Depending who you ask, social media is either leading or lagging the Internet in general in terms of its growth rate, but one thing’s for sure: they’re both growing like crazy.

In a recent, much-discussed forecast, BIA/Kelsey predicts that social media advertising spending will jump from $4.6 billion in 2012 to $9.6 billion in 2016, for a cumulative annual growth rate of 19%, with social display advertising of various kinds increasing from $3 billion to $5.4 billion over the same period. Meanwhile native social media advertising, defined as branded content integrated within a social network experience, will increase from $1.5 billion to $3.9 billion, and social-mobile ad revenues will jump from $500 million to $1.5 billion.

Turning to the Internet overall, eMarketer predicts online ad spending will increase from $39.5 billion this year to $53 billion in 2014 and $62 billion in 2016, for a cumulative annual growth rate of around 12% over this period. In other words, in this scenario social media ad spending is outpacing the Internet at large, impressive as the latter is.

Logically social media ad spending will also make up a larger proportion of total online ad spending over this period. Combining the BIA/Kelsey and eMarketer forecasts (which is not exactly scientific, I admit) social media’s share of total online ad spending will increase from 11.6% in 2012 to 15.5% in 2016.

(As a side note, the latest 2016 figure for social media ad spending from BIA/Kelsey is down $200 million from an earlier prediction of $9.8 billion, published in May of this year -- a small change in the big scheme of things, which may however be of interest to those versed in the dark arts of forecasting. I’m curious what changed?).

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