Retailers shift their ad spending from TV, radio and print ads to digital ads.
That’s nearly double the $8.3 billion that research and consulting firm BIA/Kelsey expects social networks will generate in ad revenue this year.
U.S. social media advertising revenue will increase more than 194% to $15 billion in 2018 from $5.1 billion last year, according to a new report from BIA/Kelsey, a media research and consulting firm. That translates to a 24.0% annual growth rate.
This year social networks’ ad revenue will reach $8.3 billion, a 62.7% jump, the largest year-over-year gain in terms of dollars generated since the research firm began tracking social advertising, BIA/Kelsey says. That increase is thanks to social networks’ mobile and native ad formats, such as Facebook’s Promoted Posts ad unit, which lets a retailer pay to ensure a particular number of consumers see a post.
U.S. social display ad revenue, such as the ads that appear to the right of the news feed for Facebook’s PC users, will grow from $3.3 billion in 2013 to $5.6 billion in 2018, an 11.3% annual growth rate. And U.S. native social advertising, such as ads that appear in Facebook’s news feed or Twitter’s timeline, will jump from $1.8 billion last year to $9.4 billion in 2018, a 38.6% growth rate. BIA/Kelsey expects native social advertising will eclipse social display for the first time next year.
The report also suggests marketers are increasingly targeting consumers viewing social networks on mobile devices as U.S. social mobile ad revenues will grow from $1.5 billion in 2013 to $7.6 billion in 2018, a 38.3% growth rate.
“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,” says Jed Williams, BIA/Kelsey’s vice president, consulting. “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. We expect this growth to continue throughout the forecast period.”