Geotargeted Social Spending Will Reach $2.3 Billion by 2015

Social media ad spending is expanding at a healthy clip, and geotargeted social media ad spending -- employing information about location to reach consumers in contextually appropriate ways -- is growing even faster, according to a new forecast from BIA/Kelsey, which has total geotargeted social media spending jumping from $400 million in 2010 to $2.3 billion in 2015.

That’s a cumulative annual growth rate of 33.3%, compared to a CAGR of 25.7% for social media spending overall, which is supposed to advance from $2.1 billion to $8.3 billion over the same period. Geotargeted social media’s share of total social media spending should jump from 19% in 2010 to 27.7% in 2015.

Meanwhile, the most popular social media ad format, regardless of geotargeting capability, will continue to be display, which will increase from just under $2.1 billion in 2010 to $7.7 billion in 2015, for a CAGR of 24.2%. In proportional terms, however, that represents a slight decrease from 97.6% of social media ad spending to 92.8% of the total. Non-display social ads will increase from $50 million in 2010 to $610 million in 2015, according to BIA/Kelsey, for a CAGR of 51.6%.

Separate data from Pew Research Center indicates that the number of adults using dedicated location-based social media services like Foursquare or Gowalla remains fairly low. Pew found that while 35% of U.S. adults own a smartphone, only 12% of smartphone owners use such services -- or just 4.2% of the overall adult population.

However, there is a much broader opportunity for “geosocial” engagement through more popular sites like Facebook, which can target ads using, for example, residential location information at the city or neighborhood level. Counting Facebook as one of the “geosocial” networks, Pew found that 58% of smartphone owners use a geosocial or location-based information service.

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