Facing signal loss and challenging macroeconomic conditions, advertisers are pumping the brakes on social network ad spending. But social video is shining through the gloom.
Video formats officially account for more than half of ad spending on social networks in the US. As legacy platforms defend their market share against TikTok’s advance, advertisers have more social video options than ever before.
KEY QUESTIONS
How will social video fare during the expected ad downturn?
Which platforms are winning the social video race?
What role will social commerce and creators play in the social video landscape?
Social media will be the channel hit hardest by the digital advertising downturn.
We downgraded our 2023 US social network ad spending forecast by $16.21 billion—the biggest reduction of any channel—as difficulties abound. Why?
The impact of Apple’s and other privacy changes has shocked the system.Digital ad targeting and measurement have been changed, permanently. Since the majority of time spent with social media occurs on mobile apps, AppTrackingTransparency has been especially debilitating for social networks, which now have a lot less data to work with.
Macroeconomic headwinds aren’t easing. Some advertisers are pulling back on spending as they face inflation, a potential recession, ongoing supply chain disruption, and geopolitical instability. Meta, Snap, Pinterest, and Microsoft, which owns LinkedIn, all cited difficult economic conditions in their most recent earnings calls.
Normalization is here after a radical rebound.Advertisers boosted spend big-time in 2021 as they recovered from the pandemic slump. But 2021 was an outlier, and ad spending has come back down to earth.
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Facing signal loss and challenging macroeconomic conditions, advertisers are pumping the brakes on social network ad spending. But social video is shining through the gloom.