The Surge of Social Media Advertising

As the second-largest sector in digital advertising, the social media ad industry has experienced significant growth. Brands have poured $930 billion into social media ads since 2017. In the previous year alone, expenditures on social media ads reached $207 billion. Yet, the cumulative spending over the past six years is even more remarkable.

According to OnlyAccounts.io data, brands have collectively invested an astounding $930 billion in social media advertising since 2017.

In the span of six years, annual expenditure on social media ads has quadrupled.

With 75% of Gen Zers and nearly half of Millennials influenced by social media ads when making purchasing decisions, brands and companies are continuously investing in this advertising medium.

According to a Statista survey, brands allocated $51.3 billion to social media ads in 2017. Over the following two years, total spending surged by over $20 billion annually, reaching $97.5 billion in 2019. However, the figures skyrocketed in 2020 and 2021, fueled by the increased usage of social media platforms during the COVID-19 lockdowns.

In 2020, social media ad spending surged by nearly $35 billion, marking a 36.2% year-over-year increase, reaching $132.8 billion. However, 2021 experienced even more substantial growth, with total spending soaring by 36.3%, nearly $50 billion, to reach $180.9 billion. Despite lower growth rates in 2022 and 2023 at 4.7% and 9.3%, respectively, total spending in the social media advertising space still rose by $26 billion, hitting $207.1 billion in 2023.

According to Statista, brands are projected to allocate almost $220 billion to social media advertising in 2024, nearly 330% more than in 2017. Statistics indicate that 83% of total ad spending this year will come from mobile, up from 70% six years ago. Conversely, desktop social media ads have witnessed a decline in revenue share from 30% to 17% during this period. The entire market is expected to grow at a compound annual growth rate (CAGR) of 3.8% over the next four years, reaching a market volume of $255.8 billion by 2028.

Since 2017, American brands have invested a staggering $340 billion in social media ads, surpassing the combined spending of Chinese and UK companies. The United States leads the global market, generating substantially more revenue than other top markets. Statista data indicates that this figure is poised to increase by $76 billion in 2024, pushing total spending over the seven-year period to surpass $400 billion.

Over the past six years, Chinese brands have allocated $287 billion to social media ads, representing a 15% deficit compared to their American counterparts. However, Statista predicts that China will surpass the US market and emerge as the world's largest spender on social media ads within the next two years.

Ranked as the world's third-largest social media advertising market, the UK achieved a total ad spending of $46.6 billion. Japan and Germany come next, with $44 billion and $19.8 billion, respectively.

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Adform has become the inaugural global Demand Side Platform to align with the UN's Science Based Targets initiative.

The media buying platform Adform has made history as the inaugural global Demand Side Platform (DSP) to join the Science Based Targets initiative (SBTi).

Building on a significant year of sustainability collaborations, Adform takes its commitment to the next level by aligning with SBTi's emission reduction targets for 2030.

Adform remains at the forefront of sustainable advertising, integrating it as a core aspect of its services. In 2023, Adform joined Ad Net Zero and achieved a groundbreaking milestone by integrating with Scope3 as the first global DSP, aiding partner brands in measuring and mitigating their carbon footprint. Now, by joining SBTi, Adform further solidifies its dedication to sustainability.

The Science Based Targets initiative (SBTi) propels ambitious climate action within the private sector by empowering organizations to establish emissions reduction goals grounded in the latest climate science. A partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the We Mean Business Coalition, the SBTi stands as the premier benchmark for corporate environmental initiatives. Renowned global brands such as IKEA, JYSK, Vodafone, T-Mobile, BMW, and all major global advertising agencies have pledged their support to this initiative.

Troels Philip Jensen, CEO of Adform, commented, "The adtech sector is evolving toward fully integrating sustainability into its strategic framework, recognizing sustainability as a B2B concern. At Adform, we embrace this challenging journey, marked by numerous pivotal decisions. By pledging to science-based emissions reduction targets, we proudly uphold one of Adform's core principles, 'Stand tall,' recognizing SBTi as the pinnacle benchmark for climate action."

Anders Pilgaard Andersen, Adform's Senior Vice President, General Counsel & ESG, stated, "From Ad Net Zero to Scope3 and now SBTi, these initiatives underscore our determination to revolutionize sustainability within adtech. Our partners, encompassing Brands, Agencies, and Publishers, can trust that our platform empowers them to make sustainable campaign choices with just a click. At Adform, we take pride in translating our commitments into action and fulfilling our pledges."

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