Social ad spending’s near-term prognosis has gotten worse, not better

US social ad spending has grown by at least 20% almost every year since 2008, when we began tracking it. That boom came to an end in 2022. And this year, social network ad spending will grow at its slowest pace yet.

• We slashed our 2023 US ad revenue estimates for almost every social platform. For Snapchat (revised down by $505.2 million), TikTok (down $649.0 million), and Twitter (down $991.0 million), the cuts are significant. For Pinterest (down $31.5 million) and Reddit (down $40.9 million), the cuts are smaller but still impactful—$40.9 million is nearly 10% of Reddit’s annual revenues.
• YoY growth will be slower for every platform except Meta. Meta’s head start on fully automated ad products, such as Advantage+ Shopping Campaigns (ASC+), along with its unmatched scale plus some favorable comps, positioned the company to deliver better results than the ones it posted in 2022.
• Rising inventory, lower CPMs, and new ad formats play a role. Social’s post-ATT landscape required the platforms to rethink their ad formats and strategies. Those pivots have made advertising on social networks more affordable, contributing to the softer growth.