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The Boom in Advertising through Social Media

Have you been slightly surprised recently when you walked into your neighborhood business and were reminded that if you had clicked “Like” on Facebook, that business would have given you 20% off your purchase that day? Utilization of social media is nothing new when it comes to big business and nationwide corporations, but it seems to be catching on with even the smallest of operations.

It’s obvious that social media is becoming common culture for younger generations. Even older generations are realizing the necessity of utilizing social networks in order to keep up with the times, both professionally and with friends. It’s therefore no surprise that successful companies have jumped on the concept of social media marketing and advertising, knowing that their message or product will reach an international audience.

Research shows that companies advertising via social media are on the right track, as U.S. social media revenues for 2012 added up to an impressive $4.6 billion. What’s more, researches and forecasters have put the sum to over $9.2 billion by the year 2016. That is something worth considering, especially if a company has been tracking customer behavior and aiming to understand the interests and preferences of their customer base.

The numbers for social media advertising are nothing compared to Google’s daily ad revenue, which some seem to take as evidence that social media marketing does not work. Forecasters diverge from this outlook however, as the revenue of social media marketing has risen relatively well over the last few years. Part of the reason for this rise was that the calculation of the $4.6 billion sum includes YouTube, which provides a considerable amount of dollars through its display units.

The forecasted areas of major growth in social media advertising are local social media advertising and social-mobile app advertising. The growth in local action is estimated to triple from its current $1 billion to about $3 billion by 2016, which is already being felt through the increased amount of social-media-oriented holiday offers from small local businesses. Mobile apps for social media are expected to rise from about $500 million to nearly $1.5 billion in 2016. This could occur even faster as the rise in use of mobile apps is constantly hiking the charts, practically leaving “old-school” advertisers in the dust.

What will be interesting to see is how much the budgets of various companies will adjust to this predicted rapid rise in social media marketing profits. Several industry experts don’t expect businesses and companies to adjust their budgets quite so dramatically in a matter of four years, so unless the financing for marketing campaigns is coming from elsewhere, the rise might be over-estimated. But who knows, maybe the switch from paper ads and letters in the mail to exclusive Facebook ads and Twitter promotions will happen sooner than most would think.

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