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BIA/Kelsey Forecasts U.S. Social Media Ad Revenues to Grow from $4.6B in 2012 to $9.2B in 2016

Native social ads emerge as viable display alternatives, reaching $3.9 billion in 2016

CHANTILLY, Va., Nov. 26, 2012 /PRNewswire/ -- BIA/Kelsey, advisor to companies in the local media industry, forecasts U.S. social media ad revenues to reach $9.2 billion in 2016, up from $4.6 billion in 2012, representing a compound annual growth rate of 19.2 percent. According to the fall update to BIA/Kelsey's U.S. Local Media Forecast, the local segment of U.S. social media advertising revenues will grow from $1.1 billion in 2012 to $3 billion in 2016 (CAGR: 28 percent).

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"The year 2012 can be viewed as social advertising's 'coming of age,'" said Jed Williams, program director, Social Local Media, BIA/Kelsey. "The continued development of native ads, such as Facebook's Sponsored Stories and Twitter's Promoted Tweets, and the acceleration of mobile monetization will be the primary drivers of social advertising growth through 2016."

BIA/Kelsey defines social media advertising as money spent on advertising formats across social networks. Social display advertising will continue to account for a higher percentage of revenues, due in large part to Facebook's Marketplace Ads and YouTube's multiple display units (video, traditional banners). Spending on social display advertising will increase from $3 billion in 2012 to $5.4 billion in 2016 (CAGR: 15.2 percent), according to the forecast.

BIA/Kelsey expects robust growth during the forecast period from native social ad formats, which are emerging as viable display alternatives. The firm defines native social advertising as branded content integrated within a social network experience (e.g., the newsfeed or content stream). Spending on native social advertising will grow from $1.5 billion in 2012 to $3.9 billion in 2016 (CAGR: 26 percent). Growth will be driven by the higher premiums native social ad units command.  

The forecast also identifies mobile as a key growth area for social media. BIA/Kelsey estimates social-mobile ad revenues will increase from $500 million in 2012 to $1.5 billion in 2016 (CAGR: 28.5 percent). A variety of forces will influence this growth, including rapid social-mobile consumer usage growth, active experimentation by vendors and deep integration of native ad units on the platform.

Social Local Media Forecast at ILM West
Findings from the social local media forecast will be highlighted at BIA/Kelsey's upcoming conference, Interactive Local Media West (ILM West), which takes place Dec. 4-6, in Los Angeles. During a session titled, "Social Business Innovators," BIA/Kelsey's Jed Williams will present highlights from the forecast and lead a series of discussions with top social local media innovators featuring Mark Gilbert, VP, product, Hearsay Social; Todd Klawin, CEO, MoonTide Media; and Darren Waddell, SVP, marketing, Payvment.

The ILM West program features nearly 50 leaders from across the local industry, including a keynote by Dan Levy, director of global SMB markets for social media giant Facebook. Levy's fellow keynoters include Jason Finger, CEO, CityGrid Media; Bill Gross, CEO, Idealab; David Krantz, CEO, YP; and Todd Rowe, managing director, SMB global sales, Google.

Details about the ILM West conference, including speakers, agenda, sponsors and online registration are available at www.biakelsey.com/ilmwest2012.

About the U.S. Local Media Forecast (2011-2016)
Social advertising is included in BIA/Kelsey's display revenue forecast, which falls within the online/interactive advertising category of the firms U.S. Local Media Forecast (2011-2016).

BIA/Kelsey defines the local media advertising marketplace as those media that provide local audiences to all types of advertisers. To prepare this forecast, BIA/Kelsey analysts gathered as much proprietary and secondary information as available by segment; generated preliminary forecasts by segment, which were discussed with leaders within key segments; included third-party and public company reports to adjust and fine-tune forecasts; tied a bottom-up approach with a top-down approach; and utilized long-standing industry expertise and knowledge to adjust drivers and key assumptions. The forecast is issued annually each spring and updated in the fall.

A special "Full Edition" of the forecast is available for purchase. For more information, visit www.biakelsey.com/Research-and-Forecasts/LocalMediaForecastFull.asp or email [email protected].

About BIA/Kelsey
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research, Continuous Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey's annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company's Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey).


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