Despite GM's doubts, social ad spending set to soar

According to local-media consulting firm BIA/Kelsey, brands are expected to dramatically increase their social-media spending in the coming years.

Social-media ad spending over the coming years.
Social-media ad spending over the coming years. BIA/Kelsey

Although General Motors has decided that social-media advertising is not right for its business, a new study seems to indicate that few other companies agree.

Local-media consulting firm BIA/Kelsey yesterday revealed that U.S. social-media ad spending is expected to hit $9.8 billion by 2016, up from $3.8 billion last year. This year, companies are expected to spend $4.8 billion on social-network advertising.

BIA/Kelsey's findings come at a time when one of the largest companies in the world, General Motors, is calling Facebook advertising into question. In a report yesterday, The Wall Street Journal said that GM has decided to pull $10 million in paid advertising from Facebook , claiming that the ads didn't prove as effective as the company had hoped. GM did, however, say that it will continue to promote its brand on Facebook through free means.

But not everyone is so sure the blame should fall solely on Facebook and its advertising platform. A person familiar with the matter told CNET today that GM didn't do what it should have in order to develop an effective ad campaign on Facebook .

"Facebook advised [GM] to invest more wisely in a campaign that would reach more people," the source told CNET, adding that GM put too much of its money into the development of promotional apps and its corporate page.

"No one will know that stuff is there unless you use paid media to promote it," the source said.

Looking ahead, the vast majority of social ads will be display ads, according to BIA/Kelsey, accounting for $9.2 billion in spending in 2016. By contrast, non-display ads in social media will generate $630 million in spending that year, the company predicts.

 

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