Marketers hiding their head in the sand to the impact of real-time social ads and content on search campaigns will miss the avalanche of opportunities that come from integrating the two media. Overall, marketers will invest in U.S. social advertising about $11 billion in 2017 -- up from $6 billion this year, according to BIA/Kelsey stats released Wednesday.
Locally targeted social advertising -- those paid ads placed across social networks -- will grow at a compound annual growth rate of 26.4%, from $1.12 billion in 2012 to $3.62 billion in 2017.
Display remains the dominant social ad unit, taking about $3.7 billion this year and rising to $6.4 billion by 2017. Native social advertising -- spurred primarily by Facebook's Sponsored Stories and Twitter's Promoted Tweets -- will rise in the U.S. at 22.9% CAGR to $4.57 billion in 2017, from $1.63 billion last year.
At Facebook, BIA/Kelsey estimates that Sponsored Stories and other native ads will account for more than 50% of its ad revenue by 2014, and approach 60% by 2017. The percentage of Facebook's business expected to come from mobile, however, continues to grow, according to eMarketer. In 2011, Facebook earned no advertising revenue from mobile, but in 2012 the media contributed more than 11%. This year, more than 27% of the company's global ad revenue should come from mobile advertising, up to 38% by 2014.
This year in the U.S., marketers will spend $5.1 billion on social desktop campaigns -- growing at a CAGR of 16.6% to $8.8 by 2017, according to BIA/Kelsey. Marketers will spend $1 billion this year on mobile social in the U.S., rising to $2.2 billion by 2017.
A report from IDC released this week suggests that social sites like Facebook, Pandora and Twitter continue to take more of the mobile display advertising market in the United States. In the report, Karsten Weide, VP of Media & Entertainment at IDC, tells us that mobile display advertising rose to 39%, versus 61% in 2012 for search ads. Mobile display ads attracted $1.7 billion in 2012 compared with $0.7 billion in 2011. Growth rates have picked up again in 2012 after dipping in 2011. They were at 134% in 2010, 118% in 2011, and 132% in 2012.
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