Social media has its upside and downside, but it is a digital phenomenon that allows people to share their stories, passions, and opinions with the world.
In addition to being one of the simplest ways for people to express themselves, it allows organizations, businesses, and individuals to connect with their customers using social media campaigns.
Social Media Ad Spending To Grow at the Slowest Pace in 2022
Social networks have an increasing influence on how consumers shop, as more and more people use platforms like Instagram, Facebook, Twitter, and TikTok, according to data by Statista. Most marketers have in recent years focused on social media campaigns to push their brands online.
In 2022, the global spending on social media ads was around 230 billion U.S. dollars, and it is projected to exceed 300 billion dollars by 2024. While the US is still the leading market for social media ads, other countries have also been investing heavily in the channel.
Despite its relevance in modern-day business, organizations have since the pandemic been slashing their social media ad spending. Moreover, user growth will not exceed 2% – staying relatively unchanged from 2022.
Social networks’ ad spending has been growing rapidly in recent years, but it is expected to slow down significantly in 2022 and 2023.
According to a recent report by InsiderIntelligence, ad spending in the United States is expected to grow at the slowest pace of 3.4% to roughly $68.45 billion in 2023.
Another related report by Oberlo1 said that US companies will spend over $72 billion on social media ads in 2023, which is an 8.52% increase from 2022. However, this growth rate is much lower than the average of 31.11% from 2018 to 2021.
The global trend is similar, as MarketingProfs2 reports that social media ad spending will increase by 11.5% in 2022 and then drop to 5.2% in 2023. Some of the reasons for this slowdown include market saturation, privacy regulations, and competition from other digital channels.
InsiderIntelligence after conducting a study said that spending on social media advertisements slumped after “the pandemic boom cooled.” The drop in ad spending was significant with social media giants like Meta and Twitter posting lower-than-expected ad revenues.
“Social media companies posted significantly lower ad revenues, longtime advertisers slashed marketing teams and budgets, and interest rates forced companies to hold their wallets close,” InsiderIntelligence’s report said.
Advertisement Statistics By Platform
Meta’s Facebook is currently the most used social media marketing channel in the world based on data from Statista, boasting 2.9 million monthly active users.
Facebook is a popular choice for marketing purposes, as nearly 90 percent of surveyed marketers reported using the site to promote their products or services. This makes sense, given Facebook’s huge global reach and user base.
Despite Facebook’s popularity, YouTube follows closely with an active monthly user base exceeding 2.5 million. Still from Meta, WhatsApp, the messaging platform has roughly 2 million active monthly users.
Instagram, on the other hand, is the world’s eighth most-visited website, the fourth most popular social media platform, and the number-one most-downloaded app. WeChat and TikTok take the fifth and sixth positions, respectively as outlined by Forbes Advisor.
TikTok was the star of Q4 2022, raking in $350 million in revenue. This amount surpassed the combined earnings of Facebook, Instagram, Twitter, and Snapchat by $205 million.
In 2022, the average CTR for social media ads was 1.21%, which was slightly lower than the 1.3% CTR in 2021. This small drop does not diminish the importance of creating captivating social media ad campaigns to boost engagement and conversion across all platforms.
Social Media ROI By Platform
The return on investment (ROI) in social media advertising is measured by considering paid advertising which may vary from one marketer to another. That said, ROI is not the same across all social media platforms.
According to B2C advertisers, Facebook gives the highest ROI followed by Instagram, YouTube, and TikTok while LinkedIn comes in the fifth spot.
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