Social Media Ad Spend to Near $10 Billion by 2016

Social media advertising spending.

Social media advertising revenues will grow from $3.8 billion in 2011 to $9.8 billion in 2016

BIA/Kelsey forecasts that social media ad spend may reach $9.8 billion by 2016.  Of this total, the local U.S. social media advertising revenues are expected to reach $3.1 billion by 2016, with an overall annual growth rate of 21 percent and 29.8 percent for the U.S.

The company also expects the social non-display segment to grow from $140 million in 2010 to $630 million in 2016.

BIA/Kelsey identified several reasons for increased sales, including a current trend that sees small and medium sized businesses enhancing their understanding of social media. At the same time, platforms continue to offer better performance, richer visual formats and videos, which drive market growth.

“Better performance, coupled with richer formats and creative elements, like video, will be the principal social ad market growth drivers,” said Jed Williams, analyst and program director, Social Local Media, BIA/Kelsey.

“Social advertising’s local business penetration will steadily increase as SMBs’ understanding of social media deepens, and as the networks continually improve the ease of on-boarding and campaign management. Facebook opening its Ads API to more partners, including those that work with SMBs, and Twitter’s self-serve platform will help to ‘democratize’ social ads, which will ultimately lead to more local growth.”

BIA/Kelsey’s aggregates information from “proprietary data; company, industry and country information in the public domain; and discussions with clients and non-clients about the direction and pace of development in the local media marketplace”.

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