As the second-largest market in the digital advertising space, the social media ad industry has grown tremendously over the years.
With an estimated 4.9 billion social media users across the world and over 90% of marketers using social media to promote brands and reach customers, it`s no wonder this type of advertising has become one of the biggest revenue streams in the digital advertising industry.
Last year alone, brands and companies spent $207bn on social media ads. However, the cumulative figures for the past six years are even more impressive.
According to data presented by OnlyAccounts.io, brands spent a whopping $930bn on social media advertising since 2017.
Annual spending on Social Media ads has quadrupled in six years
With 75% of Gen Zers and almost half of Millennials making purchasing decisions influenced by social media ads, it`s no wonder brands and companies continue pouring money into this type of advertising.
According to a Statista survey, brands spent $51.3bn on social media ads in 2017. Over the next two years, total ad spending increased by more than $20bn per year, leading to $97.5bn worth of social media ads in 2019. However, in 2020 and 2021 the figures exploded, driven by the surge in the use of social media platforms amid the covid-19 lockdowns.
In 2020 alone, social media ad spending jumped by almost $35bn or 36.2% year-over-year and hit $132.8bn. But 2021 saw even bigger growth, with total ad spending rising by 36.3% or nearly $50bn in a year to $180.9bn. Although 2022 and 2023 saw much lower growth rates of 4.7% and 9.3%, total ad spending in the social media space still increased by $26bn and hit $207.1bn in 2023.
Statista expects brands to spend almost $220bn on social media advertising in 2024 or nearly 330% more than back in 2017. Statistics show 83% of total ad spending this year will be generated through mobile, up from 70% six years ago. On the other hand, desktop social media ads have seen their revenue share drop from 30% to 17% in this period. The entire market is expected to grow by a CAGR of 3.8% in the next four years, resulting in a market volume of $255.8bn by 2028.
In global comparison, the United States is the largest social media advertising market, generating far more revenue than other top markets. The Statista data show US brands spent a whopping $340bn on social media ads since 2017, or more than Chinese and UK brands combined. This figure is projected to increase by $76bn in 2024, pushing the total seven-year spending to over $400bn.
Chinese brands have spent $287bn on social media ads in the past six years, or 15% less than their US counterparts. However, Statista expects China to overtake the US market and become the world`s biggest social media ad spender in the next two years.
As the world`s third-largest social media advertising market, the United Kingdom hit $46.6bn in total ad spending. Japan and Germany follow, with $44bn and $19.8bn, respectively.