Composition of Social Ad Revenues Set for Big Changes

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May 15, 2014 | Marketing Charts

The makeup of social media advertising revenues will change significantly in the coming years, according to a new forecast from BIA/Kelsey. Native social ads are expected to overtake social display ads in revenue next year, a significant departure from BIA/Kelsey’s forecast released last year, in which display ads were projected to keep their majority share of social ad revenues through 2017. The new forecast also sees mobile social ad revenue overtaking desktop by 2018.

That’s already the case for Facebook, which saw 59% of ad revenues coming from mobile in Q1.

According to BIA/Kelsey, social mobile ad revenues in the US exceeded $1.5 billion last year, and will grow at a rapid 38.3% compound annual rate through 2018, when they will reach $7.6 billion. That compound annual growth rate (CAGR) will be more than double the comparable figure for desktop social ad revenues (15.3% CAGR), which were estimated to total $3.6 billion last year and are projected to double to $7.4 billion by 2018. The rapid growth for mobile social ads is attributed to accelerated consumer usage (as social networking consumption becomes even more heavily driven by mobile devices) and more rnatives. Social advertising is included in BIA/Kelsey’s display revenue forecast, which falls within the online/interactive advertising category.

BIA/Kelsey specifically delineates native social advertising, which the firm defines as branded content integrated directly within a social network experience (i.e., the newsfeed or content stream). These integrated, advertorial qualities differentiate native ads from traditional display. BIA/Kelsey’s definition of social advertising does not include revenues derived from virtual currency, social marketing/measurement platforms and services, or social commerce.

BIA/Kelsey’s Annual U.S. Local Media Forecast (2013-2018) draws from multiple sources. BIAKelsey-US-Social-Ad-Revenues-Display-v-Native-2013-2018-May2014

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