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Ad revenues within social set to rise by 31% but in real terms growth will decline

Ad Revenues

Ad revenues across social media platforms have seen vast increases in the last couple of years – with figures set to soar to even greater levels. Overall, across all the sites, there will be a year-on-year increase from 2013 to 2014. However the largest growth was probably already witnessed last year, in which case what we will really see is a decline in growth, albeit alongside an increase in revenue.

Online marketing data company eMarketer collated the information to show the revenues for 2012 and 2013, and have made projections for this coming year and for 2015. All the main players are included plus smaller social media channels.

Although both this year and next will see a vast increase the biggest change was witnessed between 2012 and 2013. This was likely due to a shift from independently owned, venture capitalist-backed sites to bigger players buying up smaller success stories. This, and the fact that some became publically listed companies, means there is more pressure on advertising revenues 1. to be implemented and 2. to make money for shareholders.

For Facebook and Twitter becoming public meant they had to channel much of their investment and manpower in to creating successful advertising streams whilst maintaining user experience, whereas previously they only had the latter to worry about. After Facebook and Yahoo bought Instagram and Tumblr respectively, the smaller sites look set to follow in a similar vein.

The only category in fact that will see improved year-on-year growth is the ‘other’ category listed which includes smaller social media sites. This is most likely because for many there were no advertising revenue streams in place until late last year.

Another reason for growth declining is that at some point the market will hit its peak and so advertising revenues will plateau; the few years from 2012 onwards could be said to be the point of exponential growth as a sector new to advertising revenues took off.

What next for social media and online marketers?

As the growth for ad revenues has jumped from nowhere pre-2012, social media sites and marketers will have to produce and adapt to new ways of quantifying successes of advertising in this way. In order for online marketers to continue to invest in social media advertising they will need to be able to prove and to quantify how a particular channel is performing.

The social media sites themselves will have to be able to respond to this by having clear indicators that will determine whether advertising has been successful or not.

The area with the most potential for growth over the next few years will probably be with SMEs – and so with their smaller marketing budgets to play with it will become even more essential for social media sites to be able to track and to prove that their advertising works.

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Social network ad revenues chart

About James Nicholson

James Nicholson is the founder of Rocket Marketing Hub. He’s worked in Digital Marketing for over 10 years for companies like Utility Warehouse, NHS and hundreds more.

You can connect with James on Twitter and Facebook

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