Mumbai: Social platforms dominate the global media landscape, and wield huge influence over how brands reach their audiences. Meta is on track to surpass all global linear TV in ad revenue by 2025. But X’s ad revenue problems will continue in 2024. TikTok’s ad revenue growth will slow down this year due to the situation in the US.
According to Warc Media’s latest forecasts, social media is now the largest channel worldwide by advertising investment, having overtaken paid search last year, and is forecast to total $247.3bn in 2024, up 14.3% year-on-year.
Data from GWI shows that time spent with social platforms has increased by 50% since 2014, from an average daily consumption of 95 minutes to 152 minutes in 2024, and according to data.ai, worldwide user numbers across social platforms have risen 169% since 2014.
Alex Brownsell, head of content, Warc Media, said, “Much of social media’s success has been driven by Meta’s remarkable renaissance. However, social’s stronghold on budgets can also be seen in TikTok’s rise, and a return to double digit ad revenue growth at Snapchat and Pinterest.
“However, with this dominance comes challenges, such as rising advertising loads in social environments, and the impact of AI on media planning. In this report, we take a holistic view of the global social media landscape, which shows no sign of losing momentum.”
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: Global social spend is set to total $247.3bn in 2024, up 14.3% year-on-year, a slight deceleration from +16.0% in 2023. Western platforms are growing fastest, fuelled by Chinese brands targeting US and European audiences.
Meta is on track to overtake linear TV in ad revenue in 2025: Both Facebook and Instagram grew by more than 20% year-on-year in Q1 2024, and Meta is forecast to earn $155.6 billion in ad revenue this year, representing a 63 % share of global social spend, fuelled by a wave of investment from Chinese exporters, and the popularity of its AI tools. According to Warc Media, Meta is set to overtake global linear TV in advertising spend terms in 2025.
Investment in AI has helped to drive incremental social spend: Tools like Meta’s Advantage+, which automate aspects of creative and media planning, are becoming increasingly popular with advertisers. However, some brands have complained of erosion to campaign efficiencies.
TikTok’s growth will slow in 2024, amidst US ban concerns: Warc Media forecasts TikTok will earn $23.1bn this year. The +18.3% year-on-year increase marks a significant slow-down from the 87.8% growth rate it clocked up last year, despite the introduction of new search and shopping ad formats. Given TikTok’s unique popularity with Gen Z audiences, many advertisers in the US will be hoping a ban does not come into effect.
Snapchat and Pinterest return to double digit ad growth: Pinterest is set to enjoy a 17.3% year-on-year increase in ad revenue in 2024, while Snapchat is forecast to grow 13.7%. This strong growth of both platforms is attributed to a refocus and leaning into their respective strengths.
Twitter/X’s ad revenue woes are set to continue in 2024: X’s ad revenue in 2024 is predicted to decline by 6.4% globally and 5.1% in the US. However, compared to its startling 46.4% decrease in 2023, it marks something of a stabilisation for the Elon Musk owned platform, largely due to political ad spend. However, marketers remain concerned with brand safety and X’s much publicised issues with bots.
Ad loads are rising across social platforms: Meta reportedly increased its ad load in Q4 2023 to 19.1%, with most Reels sessions now having seven or more ads. Platforms are aiming to improve monetisation “efficiency” with new search and shopping ad formats.
Social platforms are becoming increasingly homogeneous: As TikTok prepares to launch a photo sharing app, Notes, and Meta invests in AI search tools, social platforms are converging in the advertising formats and commerce functionality they offer to brands.
Rachel Morman, global head social, PHD Global said, “AI offers incredible new opportunities for [social advertisers], delivering multi-advertiser contextual ads, but that may not be suitable for all brands – such as those that need to heavily consider exclusivity and adjacency.”
Gillian Collison, global head of social, GroupM, said “The challenge remains to enable brands to leverage their own data and analytics to understand target audiences at a deeper level, enabling personalised experiences across all mediums.”
Social Media outlook in the US, UK, China and the Asia Pacific
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.
The Asia Pacific: 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 the Asia Pacific 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.
