Advertisers worldwide will spend $23.68 billion on paid media to reach consumers on social networks this year, according to new figures from eMarketer, a 33.5% increase from 2014. By 2017, social network ad spending will reach $35.98 billion, representing 16.0% of all digital ad spending globally.
Advertisers in the US and Canada place a premium on social media and will ramp up paid spending on social networks 31.0% this year to pass $10 billion for the first time. Social network advertising in Asia-Pacific will total $7.40 billion, with Western Europe the third-largest region at $4.74 billion. The drop-off in spending to the other three major world regions is steep, with Latin America reaching only $680 million in 2015, while Central and Eastern Europe and the Middle East and Africa lag further behind.
North American advertisers’ predilection for social network ad spending is reflected by the amount they spend per user. This year, advertisers in the US and Canada will spend more than $50 for each user across the social landscape in their respective countries, and in just two years, will increase that outlay to $71.37 per user, a reflection of growing spending against a maturing user base.
In Western Europe, we see a similar trend, and social network ad spending per user will remain about half the amount spent in North America throughout our forecast. By contrast, Asia-Pacific social networkers will command only $8.04 each from advertisers trying to reach them this year, and that figure will increase to just $10.54 by 2017. In that region, user bases are still growing significantly while spending still lags.
The US and China will be the leading individual countries in social network ad spending for the foreseeable future, collectively commanding more than half the worldwide market throughout our forecast period. This year, advertisers in the US will spend $9.59 billion on social ads, up 31.0% from 2014 and more than double the amount they spent in 2013. By the end of our forecast period, social network advertising in the US will total $14.40 billion—just shy of 20% of all digital ad spending countrywide. In China, ad spending on social networks will reach $3.41 billion this year and is expected to increase to $6.11 billion in 2017, or 12.5% of all digital ad dollars in the country.
At a company level, unsurprisingly, Facebook is dominating the paid social advertising landscape globally. eMarketer estimates that in 2015, the company will make $15.50 billion in ad revenues, or 65.5% of all social network ad spending worldwide. That portion is up from 2014, when Facebook owned 64.5% of the social ad market. Twitter is also gaining share, expected to take 8.8% of global social network ad spending, or $2.09 billion, up from 7.1% share in 2014. LinkedIn, the other major US-based social ad seller for which eMarketer forecasts ad revenues, will make $900 million in advertising this year, but its share of global social ad spend will dip to 3.8%, down from 4.2% last year.
Source: eMarketer