May 16, 2012

Study: Social ad spending will hit $9.8B by 2016

Brands will spend a total of $9.8 billion on social media advertising by 2016, up from $3.8 billion last year, according to a BIA/Kelsey report. YouTube and LinkedIn will emerge as major digital ad platforms, the report predicts, with social video playing an increasingly important role in brands' digital strategies. "We've slightly accelerated our numbers for 2012 and 2013 because of the growth we've seen with social video, with YouTube as a driver," analyst Jed Williams said. Via Bloomberg 

Higher ad spending at Google Inc. (GOOG)’s YouTube and LinkedIn Corp. (LNKD) boosted BIA/Kelsey’s forecast from six months ago. In November, BIA/Kelsey projected 2011 social-media advertising revenues would reach $3.4 billion -- $400 million less than the figure released today.

The researcher bumped up its 2012 social-media advertising spending estimate by $200 million to $4.8 billion, Williams said in a phone interview. Next year’s spending will reach $5.9 billion, up from the $5.8 billion BIA/Kelsey expected in November, he said.

The increased forecast comes as the world’s largest social networking site, Facebook Inc. (FB), prepares to sell shares to the public. Facebook is poised to surpass United Parcel Service Inc. as the most valuable company in history to go public in the U.S., based on market capitalization, data compiled by Bloomberg and Dealogic show.

“Better performance, coupled with richer formats and creative elements, like video, will be the principal social-ad market-growth drivers,” Williams said in a statement.