Good news for those who believe social media advertising revenues will be crushed by mobile: A researcher is estimating that the category will double by 2016 to become a $9.2 billion business, in the U.S. at least.
BIA/Kelsey projects a 19.2% annual growth rate for the next four years for social media ads. The researcher believes that so-called native ads like Facebook’s Sponsored Stories and Twitter’s Promoted Tweets will lead the growth. Such native social advertising will grow from $1.5 billion in 2012 to $3.9 billion in 2016 for a 26% annual growth rate. BIA/Kelsey predicts that Facebook, Twitter and others including StumbleUpon and Tumblr will be able to command higher prices for the formats.
Even the oft-derided social display ads — the ads you see on Facebook’s right-hand column or the banners on YouTube — will also grow from $3 billion in 2012 to $5.4 billion in 2016, which amounts to a compound growth rate of 15.2%.
The report’s sunny take contrasts a bit with a pervasive belief that the growth of mobile will torpedo overall ad revenues. For instance, Facebook’s stock fell as low as $17.55 after the company went public at $38 as investors punished the company for its perceived lack of ability to monetize its growing mobile audience. But even Google, which has anticipated the mobile revolution, has seen its average cost-per-click fall as mobile takes a bigger slice of the overall pie.