Ad spending on social media has not reached its full potential but will likely grow in the near future.
"Consumers consume 25 percent of their media online. But, there's only 12 percent of all ad dollars online. If ad dollars meet eyeballs you'll have a $50 billion increase in ad spending," Miles Nadal, chairman and CEO of the world's eighth-largest ad agency, MDC Partners, told CNBC Tuesday.
"Eyeballs will translate into ad dollars," added Nadal. "Marketers are more enthusiastic now than ever before. It deals with the fact that people want to hang out with celebrities, with brands."
"Every single social media firm who's potentially going to access the capital markets" is of interest to the investment banking community, he added. "It is the hottest thing that I have seen since the Internet bubble."
The increased dialogue between the consumers and the brands have made "people feel empowered and it also deals with the human nature of wanting to be a part of a community," he said.
For this reason the amount of money that marketers are spending on social media is exhilarating, and valuations will increase.
Take Facebook. "It will be higher. You'll say to me in six months, how is it $100 billion, how's it $120 billion, because you know the market always is over-exuberant. So it prices in the present value of the future earnings stream," Nadal explained.
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