- Social-media advertising spend will grow rapidly through 2018. US social-media ad spend will top $8.5 billion this year and reach nearly $14 billion in 2018, a five-year compound annual growth rate (CAGR) of 18%, according to BI Intelligence estimates based on 2013 data from BIA Kelsey.
- Spending on mobile social-media advertisements will surpass nonmobile social spend this year, accounting for more than half of US social-media ad dollars by the end of the year.
- Spending on Facebook, Twitter, and LinkedIn skyrocketed during the second quarter of 2014. Growth in ad spend at the three companies combined was 71%.
- Mobile is a major driver of this growth. Spending on mobile social ads in the US will exceed $9.1 billion by the end of 2018, increasing at a CAGR of 27.3% from 2013, while nonmobile social spending will grow at a CAGR of just 7.4%.
- Increased mobile adoption has fueled mobile ad revenue increases. Facebook, Twitter, and LinkedIn experienced sizable growth in mobile monthly active users (MAUs) during the second quarter, though mobile user growth rates are starting to taper.
- Programmatic platforms at Facebook and Twitter are also driving up spend. Spending on FBX, Facebook's desktop-only advertising exchange, and MoPub, Twitter's mobile-focused programmatic platform, experienced big increases during the quarter.
- Advertising performance also improved during the quarter, despite concerns over the effectiveness of social-media ads. Click-through rates (CTRs) on Facebook averaged 0.36% globally during the second quarter of 2014, rising from 0.14% one year earlier, based on a selection of advertisers studied by Nanigans.
Market Growth And User Trends
Ad spending on top social-media platforms like Facebook and Twitter skyrocketed during the second quarter of 2014, as marketers increasingly adopted social media as an advertising platform.
US social-media ad spend will top over $8.5 billion this year, increasing by an impressive 40% from the prior year, according to BI Intelligence estimates based on 2013 data from BIA Kelsey and current spending trends. Spending will reach nearly $14 billion in 2018, a compound annual growth rate (CAGR) of 18% from 2013.
The increase in [...]