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Local Social Media Growth to Exceed National Rate

by | 2 minute read

While marketers debate the true value of their social media spending, few are willing to pull back on this format because they know customers are spending time there. Now that national companies have committed to social media, small local businesses are doing the same. One new research report claims that the growth rate on spending for local social will exceed the overall increases this sector will experience through 2012.

BIA/Kelsey sees total spending on social media rising from $3.8 billion, the 2011 level, to $9.8 billion by 2016. This equates to a compound annual growth rate (CAGR) of 21.0%. Currently, the local portion of social is valued at about $840 million. Look for that to rise to $3.1 billion in 2016, say BIA/Kelsey analysts – the equivalent of a 29.8% CAGR.

“Social advertising’s local business penetration will steadily increase as SMBs’ understanding of social media deepens, and as the networks continually improve the ease of onboarding and campaign management,” said Jed Williams, an analyst at BIA/Kelsey.

Most social media advertising is display. In 2011, only $140 million, or 3.7% of this spending was linked to other formats. By 2016, $630 million or 6.4% will be attributed to non-display formats such as online video.

Not surprisingly, Facebook is expected to be the beneficiary of much of this advertising. But other players like Twitter and LinkedIn hope to make their mark in the social media ad sector, too. For many SMBs, this will become a whole new world of promotion.

[Source: Kuckinskas, Susan. Social Media Ad Spending to Reach $9.8 Billion. Clickz.com. 15 May 2012. Web. 21 May 2012]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.

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