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Social Advertising: Growth of Native Ads To Outpace Display

Spending on paid social media advertising will reach $4.6 billion in 2012 and is expected to double over the next 4 years, reaching $9.2 billion by 2016, according to a new report from BIA/Kelsey.

Social media advertising spending: display vs. nativeFor the first time, the report broke out spending on native social advertising vs. display social advertising (Adweek). Native ads running on social media sites (ex. Sponsored Stories on Facebook, Promoted Tweets on Twitter) will total $1.53 billion this year, while growing to $3.85 billion in 2016.  According to the report, native ads are “emerging as viable display alternatives” and this fast-paced growth will “be driven by the higher premiums native social ad units command.”

According to the forecast, spending on social display advertising will increase at a slower rate, rising from $3 billion in 2012 to $5.4 billion in 2016.

Local social media advertising in the U.S. will nearly triple over the same time period, growing from $1.1 billion in 2012 to $3 billion in 2016.  National social media ad spending will nearly double, growing from $3.47 billion this year to $6.26 billion in 2016.

Mobile-based social ad spending is also predicted to see significant growth; these ads totaled $500,000 in 2012, but will reach $1.5 billion in 2016.

Jed Williams, program director of Social Local Media at BIA/Kelsey, identifies two main factors behind the growth of social advertising: “The continued development of native ads, such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, and the acceleration of mobile monetization will be the primary drivers of social advertising growth through 2016.”

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