MediaMedia BuyingReport: Facebook dominates social ad spend and this is just the beginning

Report: Facebook dominates social ad spend and this is just the beginning

Facebook will take the lion's share – more than two thirds – of global ad revenues for social sites this year, according to a report from eMarketer.

Facebook will take the lion’s share – more than two thirds – of global ad revenues for social sites this year. 

Total global social networking ad spend is predicted to hit US$32.97 billion this year. Facebook will account for 67.9% of that ($22.37 billion), followed by Twitter at 7.9%, according to eMarketer.

eMarketer_Social_Network_Ad_Revenue_Share_Worldwide_by_Company_2016_400

Of Facebook’s ad revenues, more than half  ($12.08 billion) will come from outside the U.S.

Debra Aho Williamson, principal analyst, eMarketer says Facebook is seeing a momentum across its ad business.

“On the branding side, video ads are becoming more and more popular for marketers whose objective is broad awareness. And products like Dynamic Ads, which let advertisers upload their product catalog to Facebook and then deliver relevant targeted ads, are proving highly effective for marketers that want to drive lower-funnel activities, such as purchases,” says Williamson.

Tip of the iceberg for Facebook

The report finds Facebook could still have some way to grow in ad revenue as it continues to  develop Facebook Messenger and is yet to monetise its WhatsApp asset.

Last week, Facebook announced its Facebook Messenger app had hit 1 billion monthly users. WhatsApp hit that same milestone in February.

Messenger’s big draw card is its chatbot capabilities, which give smartphone users a new way of accessing information. The chatbot capabilities were launched earlier this year at Facebook’s annual F8 developers conference in San Francisco.

Facebook_developers_Chatbot_300

“Messenger is gaining traction among marketers that want to experiment with chat bots. These are very early days for conducting business activities on Messenger, however, and it remains unclear just how important it will be as a marketing vehicle,” says Williamson.

Crouching tiger hidden dragon

Asian social messaging apps are catching up however. In March, eMarketer said it expects social network ad spending in China to total $5.33 billion in 2016. This is a 56.0% increase on the previous year and an amended (higher) forecast rate than that predicted by eMarketer in September 2015.

These revisionary forecasts are in large part a result in the rise and rise of China’s social commerce and messaging app, WeChat. WeChat has more than 700 million MAUs and was a center point of Mary Meeker’s 2016 Internet Trends report.

WeChat’s parent company, Tencent, has been exploring ways to increase revenue from the platform. Its strategy currently is a focus on revenue generation from services over advertising.

The eMarketer report predicts advertisers in China will account for nearly 47% of all social network ad spending in Asia-Pacific in 2016, and 16.2% of such spending worldwide.

Double-digit growth will continue throughout 2018, when spending will reach $9.20 billion for the year. By then, China’s share of total social network spending in the region will climb to 47.6%, and to 18.2% of the global total, the report finds.

eMarketer_Social_Network_Ad_Spending_in_China_2014-2018_400

*Featured image: Facebook Messenger developer’s site.

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