Social media ad spending to shoot up $9.8b in 2016

Portland: US social-media advertising spending may rise to $9.8 billion (Dh35.9 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's YouTube and LinkedIn 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 latest figure to be released.

"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 programme director at 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.

Growth drivers

The increased forecast comes as the world's largest social networking site, Facebook, prepares to sell shares to the public. Facebook is poised to surpass United Parcel Service as the most valuable company in history to go public in the US, based on market capitalisation, 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.