The social media ad market is in chaos. It is expected that the market condition will continue to get worse over time. Two of the most common platforms, that is, Meta and Twitter, have entered turbulence because of their hasty bet on the Metaverse. It’s one of the major reasons for the decrease in social network ad spending in 2022.
What is the good part of this overall critical situation?
That’s TikTok. Yes, you heard it right.
TikTok is shining among other social media platforms even in this critical situation. However, it is still impossible for any medium to resist the challenges that social media is facing nowadays.
The three main questions that this report will answer include the following:
- How does the latest forecast differ from what was previously expected from the social network ad spend? According to recent estimates, how much will US marketers spend on advertising on the social network through 2024?
- How is social network ad spending affected by different platforms and formats?
- What are the changing factors in the social advertising market?
Recent report shows a clear difference between the expectations and reality of social network ad spending. According to the March 2022 forecast, the ad spend was expected to be around $74.56B. However, according to the October 2022 forecast, it is $10B less than the expected value ($65.31B). So, the gap between the estimates after 9 months is almost $10 billion. In 2023, the gap will increase by nearly $16B. In 2024, the gap between the forecasts of March 2024 and October 2024 will be twice that of 2022. According to the March 2024 forecast, social network ad spending will be $99B, And it will be $79.28B, according to the October 2024 forecast. So, the gap will reach $20 billion in 2024, after 2 years.
General Social Media Advertising Stats
After deeply analyzing social network ad spending forecast, let’s look at general social media advertising statistics.
Social Media Ad Spending Has Reached $173 Billion in 2022
Majority of marketers are switching to social media platforms for advertising. Social commerce has become the most effective conversion strategy for them. Now, companies and brands are willing to spend more of their investment on social media advertising. And why would any advertiser not do that when more than 3.6 billion people are using social media platforms regularly?
Social Media Dominates the Digital Landscape
The number of people using social media is continuously increasing. More than half of the population of the world scroll through their social feeds regularly. The number is expected to reach 4.4 billion by 2025. It’s one of the top reasons social media dominates the digital landscape.
Social Media Video Ad Spending Will Reach $24.35 Billion Ii 2022
Video ads are winning over other ad types because of Instagram Reels and TikTok videos. Marketers are now interested in getting their target audience through video ads on the most popular social media platforms. Thus, video ad spending will reach almost $24.35 billion in 2022.
Trust Is Still The Most Important Component
More than half of social media users (52%) say that their top concern is their privacy and security when they use a social media platform. So, trust is still the most vital component for people as it affects their purchasing decision after watching an ad.
Brands Will Spend More On Social Ads in 2023
According to the forecast, brands will spend more on social ads in 2023. However, because of the increasing competition, marketers must be creative to make the most of this highly competitive ad space. Only high-quality and innovative content will grab the audience’s attention.
Social Media Is the Second Biggest Digital Ads Market
Social media is the second biggest digital ads market in terms of revenue. In 2021, social media generated a worldwide revenue of $153B, and now it is expected to grow and reach $252B in 2026.
Brands might eventually stop investing their ad spend in the most commonly used channels.
It doesn’t mean the ads which are running on Twitter, Facebook, and Instagram will come to an end, but marketers have started looking for more innovative and modern-day favorite platforms like TikTok, Snapchat, and Pinterest because of their rapid growth. Also, these channels are less saturated, so they will likely help brands get more impressions and attention from the audience.
The social ad market is suffering despite the overall increase in social network ad spending. The trends are continuously changing, which makes the future of the ad market unpredictable. However, marketers who stay updated and create progressive changes in their advertising strategies, budget plans, and ad spending will eventually succeed in the long run.