Advisory services company BIA/Kelsey has predicted that ad revenues for social media sites are set to go up from $2.1 billion in 2010 to $8.3 billion in 2015.
This prediction has been made by analysts in BIA/Kelsey’s U.S. Local Media Annual Forecast (2010 – 2015). According to them, social media ad spend is any money that is spent on advertising through the various social networks, but does not include virtual goods, rewards, social gaming etc.
At present the major source of advertising on these social networks is display advertising, which generated $2.1 billion in 2010 and is expected to generate $7.7 billion in 2015. However other sources of advertising such as ‘promoted tweets’ on Twitter which currently generate negligible income are likely to become popular by then and will generate $600 million.
This means that the compound annual growth rate will be 31.6%. At present of course the major amount of all the revenue is going to Facebook which is the most popular social network. It currently has more display ad impressions than both Yahoo! and Google. It is also expected that their ad share as well as revenue will further increase.
According to an eMarketer report last January, the ad revenues of Facebook for 2010 had gone up to $1.86 billion, but the revenue of MySpace had fallen. It has also been estimated that Facebook’s global ad revenue will go up to $4.05 billion in 2011.
Andrew Shotland of Social Local Media says “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.”