Social media platforms are now the biggest way companies advertise worldwide, overtaking paid search.
It's predicted that in 2024, companies will spend $247.3 billion on social media ads, a 14.3% increase from last year. People are spending more time on social media too—up 50% since 2014, from 95 minutes to 152 minutes a day in 2024. And the number of people using social media worldwide has gone up by 169% since 2014.
Alex Brownsell, Head of Content at WARC Media, explains that social media's growth is largely due to Meta's impressive revival. But it's not just Meta; TikTok's popularity and increased ad revenue for Snapchat and Pinterest also contribute to social media's success. However, along with this success come challenges like more ads on social platforms and the influence of AI on advertising strategies. Despite these challenges, the report provides a comprehensive overview of the global social media scene, which continues to thrive.
Key insights highlighted in WARC’s Global Advertising Trends: Social media reaches new peaks are:
Social is the leading media channel by ad spend globally
In 2024, the worldwide spending on social media advertising is projected to reach $247.3 billion, marking a 14.3% increase from the previous year. This growth rate is slightly slower compared to the 16.0% growth seen in 2023. Notably, Western social media platforms are experiencing the fastest growth, driven by Chinese brands aiming their advertising efforts at audiences in the United States and Europe.
Meta is on track to overtake linear TV in ad revenue in 2025
In the first quarter of 2024, both Facebook and Instagram experienced impressive growth of over 20% compared to the previous year. Meta, the parent company of these platforms, is projected to generate $155.6 billion in ad revenue this year, capturing a significant 63.0% share of the total global spending on social media advertising. This surge in revenue is driven by increased investment from Chinese exporters and the popularity of Meta's AI tools. According to WARC Media, Meta is expected to surpass global linear TV in terms of advertising expenditure in 2025.
Investment in AI has helped to drive incremental social spend
Ad tools such as Meta's Advantage+, which automate parts of creative and media planning, are gaining popularity among advertisers. However, some brands have expressed concerns about these tools causing a decline in campaign efficiency.
TikTok’s growth will slow in 2024, amidst US ban concerns
According to WARC Media, TikTok is expected to generate $23.1 billion in revenue this year. This represents an 18.3% increase compared to the previous year, which is notably slower than the 87.8% growth rate seen last year. Despite the introduction of new search and shopping ad formats, TikTok's growth has decelerated. Given TikTok's strong appeal to Gen Z audiences, many advertisers in the US are concerned about the possibility of a ban being imposed.
Snapchat and Pinterest return to double digit ad growth
In 2024, Pinterest is expected to see a 17.3% year-on-year increase in ad revenue, while Snapchat is forecasted to grow by 13.7%. The robust growth of both platforms is credited to their strategic refocusing and emphasis on their unique strengths.
Twitter/X’s ad revenue woes are set to continue in 2024
In 2024, X's ad revenue is projected to decline globally by 6.4% and by 5.1% in the US. Although this reflects a decrease, it indicates a stabilization for the platform owned by Elon Musk, especially when compared to the significant 46.4% decrease seen in 2023. This stabilization is primarily attributed to political ad spend. However, marketers continue to express concerns regarding brand safety and X's well-known issues with bots.
Ad loads are rising across social platforms
In the fourth quarter of 2023, Meta purportedly raised its ad load to 19.1%, with a majority of Reels sessions now featuring seven or more ads. Platforms are striving to enhance monetization "efficiency" by introducing new search and shopping ad formats.
Social platforms are becoming increasingly homogeneous
As TikTok gets ready to introduce a photo-sharing app called Notes, and Meta invests in AI search tools, social media platforms are increasingly aligning in the advertising formats and commerce features they provide to brands.
Rachel Morman, Global Head of Social at PHD Global, points out that while AI presents exciting opportunities for social advertisers, such as delivering contextual ads across multiple advertisers, it may not be suitable for all brands, especially those that prioritize exclusivity and adjacency.
Gillian Collison, Global Head of Social at GroupM, adds that the ongoing challenge is to empower brands to utilize their own data and analytics effectively, enabling them to gain deeper insights into target audiences and create personalized experiences across various mediums.
Social Media outlook in the US, UK, China and APAC
US: Social media advertising spend is set to reach $75.6bn this year. Facebook remains the biggest player, forecast to reach $36.3bn, followed by Instagram ($21.3bn), and TikTok ($10.1bn).
UK: Social media advertising spend in the UK grew 15.6% year-on-year in 2023, and is forecast to reach £8.8bn in 2025, per the latest AA/WARC Expenditure Report. Much of this growth is attributed to rising spend on social video formats, up 20.0% year-on-year, according to IAB UK.
China: Major Chinese social platforms have suffered an ad revenue slowdown since 2021, however, signs of positivity are emerging: video and photo sharing app, Xiaohongshu, with 312m MAUs in China, has reported its first profit; and Douyin, owned by ByteDance, is forecast to earn $30.2bn in ad revenue, $7bn more than TikTok, its Western sibling.
APAC: more than 70% of consumers in Asian markets, including Indonesia and the Philippines, use social media across multiple stages of their buying journeys. GWI data shows that social media users in APAC are 11.2% more likely than the global average to purchase a product or service on a weekly basis because of social media influencer endorsement.
News Source: European Business Magazine
