For years it has seemingly been gangbusters on growth in the ads industry, particularly in digital advertising. Now, for the first time in ages, that growth seems to be slowing, and in some cases, even reversing.
According to Insider Intelligence and their Ad Spend Forecast marketers are expected to spend $65.31 Billion on social marketing this year. That represents a 3.5% growth rate over 2021, but a huge departure from forecasts, which were over $74 billion. In other words, growth of digital advertising is not keeping pace with the economy, coming in roughly 7% lower than expected.
While growth is expected pick up in the next two years—led mostly by TikTok and a surge in social video advertising—the $79.28 billion projected in 2024 will be more than $20 billion below Insider’s March 2022 expectation.
There seems to be a general downturn in social media fortunes of late, as the pandemic boredom begins to lessen and people go back to being social in person.
A year ago, companies like Facebook parent Meta and Snap Inc reported double-digit percentage increases in quarterly revenues; in the most recent third quarter, Meta’s revenues and net income dropped and Snap’s revenues trailed analysts’ estimates.
Predictioins on winners and losers:
From our seat at Hemon Media atop tons of advertising accounts across platforms, we can take a swag at predictions on who will fare better and worse with the coming shakeup:
- TikTok stands to realize the biggest gains in ad revenues among social provided it can steer safely through increasing government pressure related to Chinese influence on American politics.
- Meta will suffer as Zuckerberg continues to wander around La La Land and Facebook posts its first-ever annual decline in revenues. Twitter’s revenue growth will also slow in 2022, 2023, and 2024; the company is expected to lose tens of millions of users over the next two years as Elon Musk tries to spit shine a turd.
A ton of this has to do with measurement, and paid traffic not being the safe bet it once was due to signal loss and other post iOS14 fallout. Whatever the reason, there are going to be a lot of agencies falling by the wayside as true marketing skill once again becomes the nexus for success in digital advertising.
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