Social Media Ad Revs Forecast To Hit $15B By 2018

Stateside, social media advertising revenues will grow from $5.1 billion in 2013 to $15 billion in 2018, representing a compound annual growth rate (CAGR) of 24%.
That’s the latest forecast from BIA/Kelsey, which attributes the rapid increase to an explosion in mobile and native advertising.
From 2013 through 2018, social display ad revenues are expected to grow from $3.3 billion to $5.6 billion, representing a more modest CAGR of 11.3%. During the same period, however, U.S. native social advertising will surge from $1.8 billion to $9.4 billion, representing a CAGR of 38.6%.
As such, BIA/Kelsey expects native social advertising to eclipse social display for the first time by 2015.
Most of the credit goes to Facebook’s News Feed ads and Twitter’s Promoted Tweets, according to the research firm. Driven by Facebook and Twitter, U.S. social mobile ad revenues eclipsed $1.5 billion in 2013. U.S. social mobile ad revenues will reach $7.6 billion by 2018, representing a CAGR of 38.3%.
Jed Williams, vice president of consulting at BIA/Kelsey, said he was surprised by the findings.
“We were initially skeptical about the social-mobile market’s ability to capture optimal wallet share because of mobile’s limitations, such as smaller screen size, limited ad inventory and static creative,” Williams explains in the new report. “Over the past year, however, Facebook, Twitter and other networks have generated dramatic revenue growth, primarily as a function of mobile ad acceleration and largely through natively integrated mobile ad formats.”
Also of note, BIA/Kelsey forecasts locally targeted social advertising in the U.S. to grow at a 31.6% CAGR, from $1.3 billion in 2013 to $5.2 billion in 2018.
The research firm defines social media advertising as money spent on advertising formats across social networks. It specifically delineates native social advertising as branded content integrated directly within a social network’s user experience, i.e., the newsfeed or content stream.
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