Report: Social Media Becoming Major Ad Platform

A convergence of three high-tech trends — precise ad analytics, programmatic audience-buying tools, and the stickiness of social apps — means social media is becoming one of the major ad platforms of the future.

New data from BI Intelligence finds that US social-media ad spend will top $8.5 billion this year and reach nearly $14 billion in 2018, up from just $6.1 billion in 2013. Social will grow faster than all other offline ad mediums, and faster than traditional digital formats, like desktop display ads and search ads.

In the report and associated PowerPoint presentation, BI Intelligence looks at all the numbers for this fast-growing ad industry and explores the drivers of social ad adoption.

Here are some of the key takeaways:

• Social-media advertising spend will grow rapidly through 2018. It's up 40% this year and will top $8.5 billion, growing to nearly $14 billion in 2018, a five-year compound annual growth rate (CAGR) of 18%. 
• Social media ad spend has reached the mobile-tipping point. Spending on mobile social-media ads, including mobile app-install ads, will surpass non-mobile spend by the end of this year in the US. In 2018, two-thirds of social-media ad spend will go to mobile, creating a $9.1 billion social-mobile market. 
• Mobile app-install ads and programmatic buying are also growth drivers. Analyses suggest that mobile app-install ads could account for anywhere from one-quarter to more than one-half of Facebook's mobile ad revenues.
• Prices are increasing as performance and targeting improve, even as ad loads stay steady on the established platforms. Facebook, for example, is not likely to increase the amount of in-feed native ads an average user will see.