BIA/Kelsey, leader in local marketing and advertising research, is predicting a marked change to the face of social media advertising and the revenues it generates between now and 2018, as reported in MarketingCharts.
Mining data from a range of sources, BIA/Kelsey’s Annual U.S. Local Media Forecast (2013-2018) contends “…Native social ads are expected to overtake social display ads in revenue next year…” This marks a revision of last year’s prediction that display ads would hold their position as the leading generator of social ad revenues at least through 2017.
Native advertising on social media (defined as advertising that resembles and performs according to user environment and experience and mimics natural content) is expected see a significant jump in revenue to $4 billion this year, more than double the revenue from 2013, and will rise steadily, eventually overtaking and replacing social display advertising. By 2018, native social advertising will generate almost two-thirds of social ad revenues (estimated to be over $15 billion). Local-targeted social advertising will see its revenues increase from about $1.25 billion last year to over $5 billion in 2018.
The report also indicates that mobile social advertising will supplant desktop revenues over the same time, citing Facebook, which already has close to 60% of its 2014 first quarter revenues coming from mobile ads, as a key indicator. The revenues from social mobile ads will continue to rise from last year’s $1.5 billion, growing at a compound annual rate (CAGR) of 38.3%, to $7.4 billion in 2018, driven primarily by a rapid increase in the use of mobile devices by consumers and a continued rise in native ad marketing on these devices.
MarketingCharts. “Composition of Social Ad Revenues Set for Big Changes,” May 15, 2015.