Integration of native ads on mobile.
Native – defined by BIA/Kelsey as “branded content integrated directly within a social network’s organic user experience (i.e. the Facebook newsfeed or Twitter content stream)” – is expected to see a huge increase in revenues this year, per the report. In fact, BIA/Kelsey predicts that native social ad revenues will more than double from $1.8 billion last year to $4 billion this year. By next year, they’ll reach $5.4 billion, overtaking social display’s projected $4.7 billion in revenues. And by 2018, on account of their expected CAGR of 38.6%, native social ads are projected to account for more than 60% share of the $15 billion in social ad revenues.
Overall, BIA/Kelsey forecasts that US social ad revenues will grow from a total of $5.1 billion last year to $15 billion in 2018. Local-targeted social advertising’s share of those revenues will grow from about 25% last year to roughly 35% in 2018.
About the Data: BIA/Kelsey defines social media advertising as money spent on advertising formats across social networks. Currently the predominant ad format is display, though native advertising formats are quickly emerging as display alte
Composition of Social Ad Revenues Set for Big Changes
May 15, 2014 | Marketing Charts
The makeup of social media advertising revenues will change significantly in the coming years, according to a new forecastfrom 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 morernatives. 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