Social Networks and Advertising: How Is the Industry Changing?
Sep 12 2023
Social networks are great places to connect with your audience and build relationships to establish your brand identity, but not all social networks are made equal — especially in the current market. Case in point: Insider Intelligence’s forecast for social network ad spending in 2022 showed that ad spend actually fell short of expectations by $10 billion. With this knowledge, it’s essential to ask why spending didn’t meet expectations and where the majority of potential customers are spending their time.
Changes in Social Network Ad Spending
Despite falling short of the original forecast, social network ad spending did increase from 2021 to 2022 and is predicted to continue growing through 2024. The expected increase in spending has shown just how powerful social media networks continue to be for businesses trying to reach their target audiences.
Advertisers spend billions of dollars on digital advertising across social media platforms each year in the United States alone. By 2025, advertisers are expected to spend over $82 billion dollars promoting their products on social networks.
Meta (Facebook, Instagram)
Facebook is one of the most powerful tools for influencer campaigns. All tiers of influencers (from micro-influencers to celebrities) use Facebook to post video content and messaging. Facebook’s merger with Instagram in late 2020 created additional spaces to advertise within the family of social media networks.
Interestingly, Meta saw a decline in revenue during the second half of 2022, while TikTok, a prime competitor in the video space, experienced significant growth in the same period.
TikTok has a low-cost point of entry for advertisers. The platform focuses on user-generated and lower-budget content, which captures parts of the market that may not be able to afford higher-budget marketing solutions. The low cost of entry has helped TikTok rise in popularity as an ad platform, as has its recognition for being a great place to work on brand discovery.
X (formerly Twitter)
This popular platform had a wild year in 2022, and the recent rebranding and name change to X still has the internet abuzz. Elon Musk removed the Trust and Safety Council, which negatively impacted brand safety. Many users who once spent their time there left — and some advertisers did the same. However, many brands continue to leverage X as a strategic way to engage with their customers and extend their reach.
Once thought of only for resumes and networking, LinkedIn is now being looked at for advertising purposes. It’s estimated that LinkedIn will capture around 25% of B2B ad spending by the year 2024 thanks in part to the growth of in-home and remote work that spurred more people to join the network between 2019 and 2023.
Pinterest, another social networking site, also sees a large portion of the advertising market. In 2021, advertisers spent $94.7 million on the platform. That was a significant increase over the year before, which sat at just $30.3 million.
What’s Driving Changes in Social Advertising?
There are many moving parts in digital marketing, and there are dozens of reasons people are turning to (or leaving) certain social media platforms.
One of the reasons that advertisers are focusing on social media is that users are becoming harder to track across multiple devices and platforms, especially with new data privacy regulations. Advertisers may still have to work out which social network has people who fall into their target demographics, but those users are largely available on those networks and all in one place.
Another factor driving change in social advertising is the elimination of third-party cookies. Advertisers need to find less invasive ways to reach their audiences, and social media platforms can be a good option. Contextual advertising, like the kinds of ads that run on TikTok, allows advertisers to reach their audiences without necessarily needing specific user information.
Overall, in 2023, social media network marketing will likely continue to be used and grow in popularity among advertisers. However, there may be a shift in which platforms are used as privacy, brand safety, and other factors are considered.
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