Report: Local social media ad spending to hit $2.3 billion by 2015

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U.S. local social media advertising spending will increase from $400 million in 2010 to $2.3 billion by 2015, according to a report released by research firm BIA/Kelsey on Nov. 14. Overall U.S. social media ad spending is expected to increase by 295% to $8.3 billion during the same period.

Jed Williams, a BIA/Kelsey analyst and program director of the firm's Social Local Media service, said the firm broke out local social media ad spending because more regional and national businesses are targeting social media ads at the local level.

“We see that trend continuing to ramp up in the next five years,” said Williams.

Facebook in August started to allow marketers to target ads according to consumers' ZIP codes. Williams said the capability is a “significant” development in the local social advertising space because it “really accelerates and improves the ability to do granular local targeting with your advertising.”

BIA/Kelsey estimated that social display ad spending will grow from $2.1 billion in 2010 to $7.7 billion in 2015. Social non-display ad spending is projected to rise from $50 million in 2010 to $610 million in 2015. Non-display advertising includes formats such as Twitter's Promoted Tweets and Promoted Trends.

“Right now, non-display is driven by what Twitter is doing,” said Williams. If Twitter were to reduce the barriers for small- and medium-sized businesses to advertise via the social network by introducing a self-serve platform or reseller channel, non-display ad spending could grow further, he said.

BIA/Kelsey does not account for social commerce, social marketing, social gaming or virtual goods and rewards when calculating its social media ad spending forecasts.

Williams said the 2012 election cycle could catalyze local social ad spending growth by creating “mass awareness and adoption of how to do effective Facebook advertising and targeting.”

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