US Social Media Ad Spend to More Than Double by 2016

May 15, 2012

biakelsey-social-media-advertising-spend-2011-2016-may2012.jpgUS social media advertising revenues will increase from $3.8 billion in 2011 to $4.8 billion this year, and then more than double to $9.8 billion in 2016, details BIA/Kelsey in a May 2012 forecast. Defining social media advertising as money spent on advertising formats across social networks, the company predicts that display, which makes up the lion’s share of spending, will grow from $3.6 billion in 2011 to $4.6 billion this year and $9.2 billion in 2016. The social non-display segment is expected to grow from $140 million in 2011 to $630 million in 2016. The compound annual growth rate for the total spend is estimated at 21% (20.6% for display, and 35.2% for non-display).

Local to Get Bigger Share of Spend

bia-kelsey-social-media-ad-spend-local-v-national-2011-2016-may2012.jpgBreaking down the forecast into local vs. national spend, BIA/Kelsey predicts that the local segment of US social media advertising revenues will grow from $840 million in 2011 to $1.2 billion this year, representing a 43% increase. This means that this year, the local segment will hold 25% share of total social media advertising revenues.

By 2016, BIA/Kelsey expects local to account for $3.8 billion in social media ad spend, while the national segment will have increased from $3.6 billion (in 2011) to $6.7 billion. In 2016, then, local will represent 31.6% share of total spend.

Facebook Social Ads Get Higher Adoption

In related research, data from Marin Software released in May 2012 shows that Facebook advertisers are getting comfortable with new social ad formats, such as sponsored stories. In fact, year-over-year, Marin has seen an increase from 5% to 23% in Facebook ad budgets directed to social ads, and predicts that by the end of this year, social ads could make up half of Facebook ad budgets.

Other Findings:

  • According to Marin Software, click-through rates (CTRs) for social ads have jumped 50% year-over-year.
  • Cost-per-click (CPC) for these ads has risen by an even more dramatic 86% year-over-year.
  • Looking at select countries across the globe, the report reveals Facebook ad CTRs to be highest in India (0.13%), with the US and Eurozone countries following (both at 0.06%).
  • Facebook ad CPCs are 50% higher in the UK than in the US ($0.75 vs. $0.50).
  • Cost per thousand impressions (CPM) is highest in the US ($0.32).
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