Social Ad Revs Predicted To Hit $11B By 2017

Facebook-AA2Social advertising revenues are on track to reach $11 billion by 2017. If accurate, that would represent a compound annual growth rate of 18.6% from $4.7 billion in 2012.
 
Along with continued interest from consumers, new ad products are credited with driving social ad revenues.
 
"Native social formats, including video and mobile-social advertising, will be the principal market growth drivers," according to Jed Williams, director of consulting and senior analyst at forecaster BIA/Kelsey.
 
Overall, "social networks are evolving their ad products and features to improve performance," Williams said.
 
In particular, BIA/Kelsey expects social advertising's local penetration to maintain steady growth as networks improve the ease of “onboarding” -- or the process by which brands and businesses familiarize themselves with new technology -- local targeting and campaign management.
 
Locally targeted social ad revenues will grow at a 26.4% CAGR, from $1.1 billion in 2012 to $3.6 billion in 2017, BIA/Kelsey predicts.
 
Display remains the dominant social ad unit -- although native ad formats, such as Facebook's Sponsored Stories and Twitter's Promoted Tweets, require what Williams calls “re-thinking” of traditional display to optimize social campaigns, especially on mobile platforms.
 
BIA/Kelsey forecasts U.S. native social advertising revenues to grow from $1.6 billion in 2012 to $4.6 billion in 2017 -- representing a compound annual growth rate of 22.9%.
 
Also driven by Facebook and Twitter, U.S. social mobile ad revenues approached $600 million in 2012, and are expected to grow to $2.2 billion by 2017 -- for a CAGR of 29.9%.
 
BIA/Kelsey defines social media advertising as money spent on advertising formats across all social networks.  

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