BIA/Kelsey Forecasts Social Media Ad Spending to Reach $8.3 Billion in 2015

Five-year outlook for social media advertising dominated by display ads on Facebook

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May 02, 2011, 10:00 ET

CHANTILLY, Va., May 2, 2011 /PRNewswire/ -- Social media advertising revenues will grow from $2.1 billion in 2010 to $8.3 billion in 2015, representing a compound annual growth rate of 31.6 percent, according to BIA/Kelsey's U.S. Local Media Annual Forecast (2010-2015).

BIA/Kelsey, adviser to companies in the local media space, defines social media advertising as money spent on advertising formats across social networks. Currently, the predominant ad format is display, spending on which the firm expects will increase from $2.1 billion in 2010 to $7.7 billion in 2015 (CAGR: 30.4 percent). Though revenues for non-display ad formats, such as Twitter's "promoted products," are minimal at present, BIA/Kelsey anticipates there will be a number of format developments beyond display, and expects the social non-display segment to grow from zero in 2010 to $600 million in 2015 (CAGR: 65 percent).

"It's no surprise that Facebook commands a dominant share of all social ad impressions served and ad revenues generated," said Jed Williams, analyst and program director of BIA/Kelsey's Social Local Media practice. "As the social market leader, it already serves the most display ad impressions of any digital company, surpassing both Yahoo and Google. We fully expect Facebook to increase both impression share and ad revenue, as buyer awareness accelerates and creative formatting and targeting improve to optimize performance."

BIA/Kelsey's definition of social media advertising does not encompass virtual goods and rewards, social gaming, social commerce or social marketing.

"Over the next few years, social media factors will become a core element of various ad networks, which will in turn drive increased advertiser spending and innovation," said Andrew Shotland, associate program director, Social Local Media and proprietor of LocalSEOGuide.com. The market is ripe for a 'social AdSense' and we expect to see a number of players pushing this model in the future."

The complete forecast is available to clients of BIA/Kelsey's Social Local Media (SLM) advisory service, which is dedicated to covering the growing and dynamic social media ecosystem and the best opportunities for driving revenues with social platforms. SLM coverage centers on new local monetization models for social networks; metrics that measure social initiatives; social media transactions; social media valuations and valuation models; social commerce; Facebook's continued evolution; social's role in e-mail, reputation and presence management; next steps for check-in services; and industry analysis of how various media segments are utilizing social channels. To learn more about the Social Local Media advisory service, visit http://www.biakelsey.com/Advisory-Services/Social-Local-Media, or contact Steve Passwaiter at (703) 802-2973 or [email protected].

About BIA/Kelsey

BIA/Kelsey advises companies in the local media space through consulting and valuation services, research, Continuous Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey's annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company's Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey and Facebook

(http://www.facebook.com/biakelsey).

SOURCE BIA/Kelsey