Localized Social Media Ad Revenue Will Reach $2.3 Billion in 2015

By November 16, 2011

Analysis predicts increases for several social media ad formats. Facebook and Twitter are giving brands geotargeting tools and developing these formats.

Local media adviser BIA/Kelsey has been tracking the performance of social media ad revenue since last year, and predicts increases in US social media ad revenues, especially in the locally-targeted ad category. The firm’s “first forecast of geotargeted social media projects the local segment of U.S. social media advertising revenues will grow from $400 million in 2010 to $2.3 billion in 2015,” a growth rate of 33.3 percent per year. During the same period, predictions for overall US social media ad revenues start at $2.1 billion in 2010 to $8.3 billion in 2015.

Analysis predicts revenue increase for multiple ad formats

While local targeting has not been widely adopted by brands, analyst and program director of BIA/Kelsey's Social Local Media practice Jed Williams believes participation will increase, especially with smaller businesses. As Williams said in a press release, “...the paradigm is moving to performance, with Facebook and other networks focused on improving format, creative and targeting to boost rates and drive deeper ad engagement...” Along with local, other ad formats will increase, according to BIA/Kelsey analysis - the dominant display social ad format will increase from $2.1 billion in 2010 to $7.7 billion in 2015, non-display from $50 million to $610 million. The company is defining social media ads as “money spent on advertising formats across social networks,” excluding “virtual goods and rewards, social gaming, social commerce [and] social marketing.”

Social networks are bringing these formats to brands who want to leverage local targeting

Display ads include Facebook’s targeted ads, which give brands the ability to focus on locations by zip code, as well as other criteria. Williams commented in coverage from DM News that this tool “really accelerates and improves the ability to do granular local targeting with your advertising.” Twitter is developing the non-display format, with Promoted Tweets and Promoted Trends driving the category. The social network could bring the format even further along with lower barriers to smaller businesses “by introducing a self-serve platform or reseller channel.”

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