Bloomberg News

Social-Media Ad Spending to Jump to $9.8 Billion in 2016

May 15, 2012

U.S. social-media advertising spending may rise to $9.8 billion in 2016 from $3.8 billion last year, as companies seek to harness new tools that help reach people who interact online, researcher BIA/Kelsey said.

Higher ad spending at Google Inc. (GOOG:US)’s YouTube and LinkedIn Corp. (LNKD:US) 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.

“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,” said Jed Williams, an analyst and program director at Chantilly, Virginia-based BIA/Kelsey. “YouTube will play an increasingly important role.”

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:US), 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.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • GOOG
    (Google Inc)
    • $566.07 USD
    • -5.53
    • -0.98%
  • LNKD
    (LinkedIn Corp)
    • $201.78 USD
    • 21.14
    • 10.48%
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