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Social Media Advertising Growing Rapidly, Even As GM Pulls Out of Advertising on Facebook

The first time I considered putting ads on my blog was in 2006, and it was considered kind of low class to do so unless you were donating the proceeds to charity.

We’ve come a long way since those days.

In 2012, advertising on social media is expected to top $4.8 billion, an increase of $1.4 billion from 2011. By 2016? Nearly $10 billion —according to a new report from BIA/Kelsey forecasters. (These figures reflect just the US numbers.)

“Better performance, coupled with richer formats and creative elements, like video, will be the principal social ad market growth drivers,” said Jed Williams, analyst and program director, Social Local Media, BIA/Kelsey. “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. Facebook opening its Ads API to more partners, including those that work with SMBs, and Twitter’s self-serve platform will help to ‘democratize’ social ads, which will ultimately lead to more local growth.”

This news, of course, comes on the eve of Facebook’s massive IPO. Facebook’s income is primarily based on advertising revenues. However, some big advertisers aren’t seeing the value in social media advertising spending. Today, GM announced that they will no longer be advertising on Facebook and since they have been spending about $10 million annually, that’s a fairly large drop in the $3.7 billion annually that Facebook earns with advertising around the world.

Social media platforms won’t survive without advertising, so this is good news for us social media geeks. No matter how much we like seeing ads, we’d better get used to it.

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