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BIA/Kelsey: U.S. social media ad revenues to hit $15 billion by 2018

BY Marianne Wilson

Chantilly, Va. — Social media advertising revenues in the United States will grow from $5.1 billion in 2013 to $15 billion in 2018, for a compound annual growth rate (CAGR) of 24%, according to BIA/Kelsey’s latest U.S. Social Local Media Forecast. This year represents the greatest year-over-year jump in social media ad revenues, growing to $8.4 billion in 2014, largely due to increases in mobile and native advertising.

According to the forecast, U.S. social display ad revenues will grow from $3.3 billion in 2013 to $5.6 billion in 2018. During the same period, U.S. native social advertising, spurred primarily by Facebook’s News Feed ads and Twitter’s Promoted Tweets, will surge to $9.4 billion in 2018, up from $1.8 billion in 2013 (CAGR: 38.6%). In 2015, BIA/Kelsey expects native social advertising will eclipse social display for the first time.

The forecast also reveals social advertising revenues by platform: desktop and mobile. Driven by Facebook and Twitter, U.S. social mobile ad revenues eclipsed $1.5 billion in 2013. U.S. social mobile ad revenues will reach $7.6 billion by 2018 (CAGR: 38.3%), surpassing social desktop for the first time.

“We were initially skeptical about the social-mobile market’s ability to capture optimal wallet share because of mobile’s limitations, such as smaller screen size, limited ad inventory and static creative,” said Jed Williams, VP, consulting, BIA/Kelsey. “Over the past year, however, Facebook, Twitter and other networks have generated dramatic revenue growth, primarily as a function of mobile ad acceleration and largely through natively integrated mobile ad formats. We expect this growth to continue throughout the forecast period.”

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Report: Conflict of interest may endanger Signet-Zale acquisition

BY Dan Berthiaume

Dallas – A previously undisclosed conflict of interest may endanger the proposed $1.4 billion purchase of jewelry retailer Zale Corp. by rival Signet Jewelers. According to the New York Times, Bank of America, which represented Zale in talks with Signet, failed to disclose it had made an unsolicited presentation to Signet in October 2013 where it advised Signet to consider purchasing Zale.

The deal, under which Zale stockholders would receive $21.00 per share in cash, has been unanimously approved by the Zale board of directors. Zale’s investor TIG Advisors LLC has called the deal "grossly unfair," saying the jewelry retailers should be able to get $28.60 a share in cash and stock.

In a statement on May 15, Zale said there is “significant risk and uncertainty” to its own turnaround plan, which was designed as a stretch plan to challenge management if the chain were it to remain independent.

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Americans unsure of social media privacy

BY Dan Berthiaume

New York – Many Americans are unsure of the level of privacy afforded by social media communications. According to a new survey of 1,141 U.S. adults from research and consulting company YouGov shows that 57% of respondents did not think social media was a good method to send private messages.

In addition, older users are less likely to venture into the realms of private messaging than younger users. Two-thirds (67%) of 18-34-year-olds have used Facebook’s private messages compared to only 41% of those 55 and older.

Older users are also unsure about the status of messages. Twenty-seven percent of those aged 55 and older are not sure when their messages are private and when they are public compared to only 16% of 18-34-year-olds. Many people (50%) assume that any message, even if it starts as a private message, might be made public.

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