Social Media Spending Will Double by 2016

While GM may be disappointed with Facebook, plenty of other advertisers are still interested in social media, judging by the latest forecast from BIA/Kelsey, which predicts total social media advertising revenues will more than double over the next four years, jumping from $4.8 billion in 2012 to $9.8 billion this year. This includes both display advertising, which is predicted to grow from $4.6 billion to $9.2 billion, and non-display, on track to increase from $230 million to $630 million over the same period.

That represents a sizeable chunk of all online ad spending -- but not necessarily a big increase proportionally speaking. In a separate forecast, eMarketer sees total online ad spending growing from $32 billion this year to $62 billion in 2016. If both predictions turn out to be right, that means social media’s share will increase from 15% to 15.8% over the same period -- a marginal increase for what is supposed to be a hot new sector in a burgeoning medium (it’s worth noting that the eMarketer forecast is also lower than some others, with Forrester predicting $76.6 billion in overall ad spending by 2016).

Meanwhile, eMarketer predicts total U.S. ad spending will increase from $169.5 billion in 2012 to $196.7 billion in 2016. Thus online’s share of total ad spending will grow from 18.9% to 31.5% over this period, while social’s share of total ad spending will grow from 2.8% to 4.9%. In other words, despite its apparently impressive growth rate, according to these forecasts social media will not capture a larger share of online ad spending, and will be a fairly minor contributor to online’s proportional growth relative to other media; rather, it is just sort of “along for the ride.”

All this makes interesting reading following a fairly steep downward revision in growth projections for Facebook, which dominates social media ad spending: as noted in yesterday’s column, eMarketer recently revised its forecast for Facebook’s 2012 advertising revenues down from $6.1 billion to $5.06 billion -- a 17% reduction, suggesting advertisers may not be signing up for Facebook in quite the numbers you might expect based on all the buzz.

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