The social media advertising industry has emerged as a powerhouse, with brands collectively spending a staggering $930 billion since 2017, showcasing the immense growth and influence of this digital marketing avenue.
In an era where social media boasts an estimated 4.9 billion users globally and over 90% of marketers utilize these platforms to promote brands and engage customers, it comes as no surprise that social media advertising has become one of the leading revenue drivers in the digital advertising realm. In the past year alone, brands and companies invested a substantial $207 billion in social media ads. However, when considering cumulative figures over the last six years, the scale of this investment is truly remarkable.
Data presented by OnlyAccounts.io highlights that brands have poured an astounding $930 billion into social media advertising since 2017, underlining the sustained and substantial financial commitment to this digital marketing strategy.
Yearly Expenditure Quadruples Over Six Years
The annual spending on social media ads has witnessed a fourfold increase over the last six years. A significant factor driving this surge is the substantial influence social media wields over consumer behavior, particularly among the younger generations. With 75% of Gen Z and almost half of Millennials making purchasing decisions influenced by social media ads, brands are consistently allocating significant budgets to this advertising channel.
A Statista survey reveals that brands spent $51.3 billion on social media ads in 2017. Over the subsequent two years, annual spending experienced a consistent uptrend, surpassing $97.5 billion in 2019. The years 2020 and 2021 witnessed explosive growth, attributed to the surge in social media usage during the COVID-19 lockdowns.
In 2020, social media ad spending surged by nearly $35 billion, a 36.2% YoY increase, reaching $132.8 billion. The momentum continued in 2021, with spending expanding by almost $50 billion, a 36.3% YoY rise, totaling $180.9 billion. Although 2022 and 2023 saw more modest growth rates of 4.7% and 9.3%, total ad spending in the social media space still increased by $26 billion, reaching $207.1 billion in 2023.
Looking ahead to 2024, Statista predicts brands will invest nearly $220 billion in social media advertising, marking a nearly 330% increase from 2017. A notable shift is observed in the revenue distribution, with 83% of total ad spending projected to be generated through mobile, up from 70% six years ago. In contrast, desktop social media ads are experiencing a decline in revenue share from 30% to 17% during this period. The overall market is expected to grow at a CAGR of 3.8% in the next four years, culminating in a market volume of $255.8 billion by 2028.
US Dominates Global Spending
In a global perspective, the United States stands as the largest social media advertising market, contributing significantly more revenue than other leading markets. The data from Statista indicates that US brands have spent a remarkable $340 billion on social media ads since 2017, surpassing the combined spending of Chinese and UK brands. The forecast for 2024 anticipates an additional $76 billion in spending, pushing the total seven-year spending to over $400 billion.
Chinese brands, while substantial players, have invested $287 billion in social media ads over the past six years, positioning them as the second-largest spender, albeit 15% less than their US counterparts. Statista anticipates China’s ascent to overtake the US market, becoming the world’s leading social media ad spender in the next two years.
As the third-largest social media advertising market globally, the UK has contributed $46.6 billion in total ad spending. Following the UK, Japan and Germany round out the top five with $44 billion and $19.8 billion, respectively. The comprehensive overview of social media ad spending underscores the industry’s meteoric rise and the central role it plays in contemporary advertising strategies.
