U.S. social media advertising revenues will exceed $11 billion in 2017, almost double last year’s total of $6.1 billion, according to the latest forecast from Mintel -- but don’t look for much spending growth in traditional display ads. Instead, newer ad formats -- including much ballyhooed native advertising -- will account for the lion’s share of growth over the next few years, the market and media intelligence firm predicts.
Mintel observes that all the trends are pointed in the right direction for a big increase in social media ad spending: 50% of U.S. social network users say social media has at least some influence on them when they are researching purchase decisions for products and services.
Admittedly, just 9% of networks said they have purchased something by clicking on a social media ad, but the number is higher among men and women ages 18-34, with 21% of men in this age group saying they have purchased a product by doing so. Furthermore, 79% of respondents said they have viewed or shared content from a company or the company’s social media page, and a quarter said they have sought more information via search after seeing content on social media.
Mintel’s forecast indicates a cumulative annual growth of 16% per year from 2014-2017. In terms of formats, Mintel sees total ad spending on native advertising increasing at an even faster rate, from $1.8 billion in 2013 to $9.4 billion in 2018, for a cumulative annual growth rate just shy of 40% per year.
Not surprisingly, 86% of social network users say they visit Facebook at least once a week -- followed by YouTube at 60%, Google at 43%, Twitter at 37%, LinkedIn at 30%, Pinterest also at 30%, and Instagram at 28%.
Mintel’s forecast for advertising spending on social media is in line with other predictions. In April BIA/Kelsey also predicted social media ad spending to reach $11 billion in 2017, with locally targeted ad revenues set to increase from $1.1 billion in 2012 to $3.6 billion in 2017, for a cumulative annual growth of 26.4%.
Meanwhile, eMarketer forecasts total mobile social ad spending to increase from $1 billion this year to $2.2 billion in 2017.