BIA/Kelsey: Social Ad Revenues to Reach $11B in 2017

BIA/Kelsey forecasts U.S. social advertising revenues to grow from $4.7 billion in 2012 to $11 billion in 2017, representing a compound annual growth rate (CAGR) of 18.6 percent.

BIA/Kelsey expects social advertising’s local penetration to steadily increase as social networks continually improve the ease of onboarding, local targeting and campaign management for both brands and SMBs. Locally targeted social ad revenues will grow at a 26.4 percent CAGR, from $1.1 billion in 2012 to $3.6 billion in 2017.

“Social networks are evolving their ad products and features to improve performance,” said Jed Williams, director of consulting and senior analyst, BIA/Kelsey. “Native social formats, including video, and mobile-social advertising will be the principal market growth drivers.”

According to the forecast, display remains the dominant social ad unit, although native ad formats such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets require 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 (CAGR: 22.9 percent).