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Facebook, Twitter, Google Taking Even Larger Bites of Social-Media Ad Buying

Stocks in this article: FB TWTR GOOG

 NEW YORK (TheStreet) -- Facebook (FB - Get Report), Twitter (TWTR - Get Report), and Google (GOOG) should be seeing advertising revenue streams grow significantly as marketers devote increasing amounts of their budgets to the three main social media platforms, according to a report by RBC Capital Markets.

Based on the report, advertisers are going to be spending more on social media. Some 71% of marketers interviewed expect that their social media budgets will increase over the next year. RBC said that 26% of respondent said they expect to spend the same amount while a scant 3% said they planned to lower their social media spending.

That being said, 43% of the marketers surveyed expect to allocate more than 20% of their advertising budget towards social media with 15% of the total marketers allocating a majority of their budget to social media advertising.

The 71% of advertisers allocating more of their budget to social media is an improvement from January 2013 estimates in which only 58% were expecting their social media advertising to increase.

In order to pay for the increases in social media advertising spending, 29% of advertisers are increasing the size of their budget to pay for the increased spending while a majority are pulling money from their non-TV offline channels, such as print, radio, mail, and outdoor advertising.

RBC looked specifically for spending changes on the three major networks: Facebook, YouTube, and Twitter. Some 59% plan to increase advertising on Facebook, 63% on Twitter, and 55% on YouTube.

While it seem that Twitter would have the strongest advertising revenue growth, because Twitter is generating less than $600 million in 2013 advertising revenues, with YouTube at $5 billion and Facebook at $7 billion, Facebook is actually going to be seeing the biggest dollar increase in advertising revenues. The number of advertisers not using Facebook was cut from 9% in September 2013 down to 5%.

Facebook may seem big now, but the social media juggernaut will keep growing its advertising on both desktop and mobile, providing a strong source of revenue growth for the near future.

While Facebook may dominate social media in terms of size, Google provides the best return on investment for advertisers because of its specialized search related advertising. Although YouTube has lower advertising growth at 55% than both Facebook and Twitter, YouTube is maintaining more of its advertisers than either Facebook or Twitter.

-- Written by Whalen MacHale in New York.

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