U.S. Social Ad Revenue Will Hit $11 Billion in 2017, Driven by Native Ads

According to BIA/Kelsey, social advertising revenues in the U.S. will hit $11 billion in 2017. In 2012, social ad revenues totaled $4.7 billion. If the company’s projections are accurate, it will mean a compound annual growth rate (CAGR) of 18.6 percent.

The forecast included an optimistic note about locally targeted social ad revenues, which totaled $1.1 billion in 2012. BIA/Kelsey expects this number to grow at a CAGR of 26.4 percent and hit $3.6 billion in 2017.

“Native social formats, including video, and mobile-social advertising will be the principal market growth drivers,” says Jed Williams, director of consulting and senior analyst at BIA/Kelsey.

According to the company, $1.6 billion was spent on social native ad formats (e.g., Facebook’s Sponsored Stories and Twitter’s Promoted Tweets) in 2012, while $3.0 billion was spent on social display ad formats. These numbers are expected to be $4.6 billion and $6.4 billion, respectively, in 2017.

A survey conducted by Nielsen found that 33 percent of people in the U.S. said that ads on social networking sites are more annoying than other flavors of online ads.

Earlier this year, Kenshoo Social found that 20.3 percent of Facebook ad spend goes to mobile, while 79.7 percent goes to desktop. The company also found that Facebook mobile ads carry a 70 percent price premium.