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Social Network Ad Revenues Increasing; Facebook Plays a Big Part

By | 09.29.15

Social Network Ad Revenues Increasing; Facebook Plays a Big Part

Outlooks for the success of social media as an advertising tool have long been high; however, Michael Essany of Mobile Marketing Watch, notes that there may be room for more growth.

According to Essany, social media chief executive officers have typically been confident about their prospects; however, global social network ad spending is increasing at an even quicker rate than expected, new data from eMarketer indicates. In fact, social media giant, Facebook, will likely drive much growth, capturing some 65 percent of social network ad revenues in 2015, alone.

Mobile Marketing Watch also notes that global social network ad spending is expected to top $25.14 billion in 2015, which is significantly higher than the $23.68 forecast from this April 2015.

That being said, there are some “big winners in this ecosphere” as well as a good amount of “also-rans.” eMarketer reports that, “The growth in social network ad spending can largely be attributed to a rapid increase in Facebook’s ad revenue. eMarketer expects “Facebook (should) capture $16.29 billion in ad revenues worldwide, a large increase of 41.8 percent over 2014. This year, Facebook will take in 64.8 percent of total social network ad spending worldwide.”

It helps Facebook that a portion of its massive growth has much to do with its ownership of Instagram, the mobile picture-sharing app. Instagram is expected to take in $600 million worldwide in 2015, some 5 percent of Facebook’s worldwide mobile ad revenue this year, MobileMarketingWatch points out.

What’s for 2016? According to forecasting, Instagram may be the app to watch and is expected to make $1.48 billion in worldwide ad revenues, an increase of 149 percent over 2015. Meanwhile, although growing, Twitter is not faring as well as Instagram is, with the site expected to increase ad revenues by 61.8 percent in 2015, to take in $2.03 billion, which amounts to 8.1 percent of the total social network ad spending worldwide. Prior eMarketer predictions expected Twitter’s growth to reach a greater 66.9 percent in 2015.

“Twitter’s slowing user growth is impacting its ad business,” said eMarketer principal analyst Debra Aho Williamson. “Twitter has improved its ad targeting capabilities, and it still has a lock on real-time conversation. However, advertisers want to reach a mass audience and that’s harder to do on Twitter than on Facebook.”

Sources:

Essany, Michael. Mobile Marketing Watch; No Monkey Business: Social Network Ad Revenues Skyrocket with Facebook Playing the 800 Pound Gorilla; September 25, 2015.

eMarketer. Social Network Ad Revenues Accelerate Worldwide: Facebook will drive growth and capture nearly 65% of social network ad revenues in 2015; September 23, 2015.

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