Social Media Advertising Market Size, Share & Trends Analysis

The global social media advertising market size was valued at USD 103.20 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 12.4% from 2021 to 2028. The increasing internet penetration rate, coupled with the rising number of social media users across the globe, is propelling the market growth. Social Media Advertising Market Size, Share & Trends AnalysisSocial media has become a great tool for companies to improve their communication with customers and a fully integrated marketing platform for marketers, which, in turn, is accelerating the market growth. Furthermore, social media advertising is rapidly gaining popularity across multiple industry verticals such as automotive, financial services, consumer goods, media and entertainment, retail, telecom, and other sectors.

Moreover, social media is evolving every day with multiple new features and capabilities being introduced from time to time by various platforms, which is expected to accelerate the market growth over the upcoming years. Furthermore, an increase in the adoption of technologies such as virtual reality (VR) and augmented reality (AR) in social media is expected to propel the market growth over the forecast period. Additionally, social media platforms are gaining popularity among users due to the availability of quick mobile access and visually-cinematic content, which is expected to accelerate the market growth. The growing youth population in emerging countries like India and China owing to the higher acceptability of online channels like social media as compared to offline channels is boosting the market growth.

In addition to this, rapid urbanization and growing disposable income across the developing economies are propelling the market growth. The escalating number of internet users, coupled with affordable data plans in developing economies, is driving the market. Advancements in social media platforms will drive the companies to introduce newer and more unique ways of engaging with the users, thereby projected to accelerate the market growth over the forecast period. However, strict government regulations regarding data security and privacy, such as General Data Protection Regulation (GDPR) in Europe, will continue to hinder the market growth. This has a significant impact on the collection, storage, and usage of customer data for delivering modified advertising content as per the customer.
Platform Insights

The mobile segment held the largest revenue share of over 70.0% in 2020. The rising penetration rate of reasonable smartphones and the growing trend among consumers to gain access to content according to their convenience are supporting the market growth. Moreover, the rising use of social media platforms on mobile by users is anticipated to fuel the market growth. In addition to this, social media users have increased by more than 13 percent in 2020. Furthermore, there are approximately 5.22 billion unique mobile users, making up 66.6 percent of the global population. This is expected to accelerate the market growth over the forecast period.

The desktop segment is expected to expand at a CAGR of 10.6% from 2021 to 2028. Changing lifestyles and preferences among consumers are resulting in a shift from traditional platforms like newspapers to digital platforms, which is expected to accelerate the market growth. Additionally, the general trend among the users to access the desktops and laptops for educational and business purposes and professional usages due to better viewing experience is encouraging the advertisers to adopt desktop channels for adverting purposes. Moreover, the increasing penetration rate of affordable internet plans in emerging economies is expected to boost the market growth over the upcoming years.

Industry Vertical Insights

The retail segment held the largest revenue share of more than 20.0% in 2020. The increasing use of social media for promoting various brands is accelerating the market growth. Moreover, the increasing popularity of social media advertisement of retail products due to medium-sized businesses spending more on branding and promoting their products through social media is accelerating the market growth. Furthermore, the retail industry is using a social media advertising strategy to increase the sale of retail products over the last few years. Additionally, the retail sector is adopting social media to build consumer relationships, which may accelerate the market growth.

The consumer goods segment is expected to register the fastest CAGR of 14.1% from 2021 to 2028. The increasing use of social media to build awareness regarding a particular product across the globe is propelling the market growth. Nowadays, companies are integrating social media advertising into their advertising plans, which is expected to boost the market growth. For an instance, according to the CMO Survey report in 2019, companies spend almost 12% of their marketing budgets on social media advertising, which is expected to accelerate the market growth over the forecast period. Moreover, the increasing advertising spending by consumer goods companies in recent years is a major driving force of the digital advertising industry.
Regional Insights

North America captured the largest revenue share of over 30.0% in 2020 due to the increasing mobile and internet penetration rate. Furthermore, consumers in the U.S. and Canada tend to be the early adopters of emerging technologies and solutions like social media, thereby accelerating the market growth. Additionally, the increasing time spent on social media in the U.S. and Canada in recent years is accelerating the market growth. Moreover, 50% of the U.S. shoppers are loyal to brands and they follow them on social media for getting information about a sale and new product stocks, which may further accelerate the market growth.

Asia Pacific is expected to register the fastest CAGR of 13.2% from 2021 to 2028. This can be credited to the increased spending on social media advertising in emerging countries like China, India, and Japan owing to the large consumer base. Moreover, increasing popularity and acceptance of the online channel among the youth are projected to boost the growth of the market over the forecast period. Furthermore, the massive penetration of smartphones and the internet in Asian countries is expected to accelerate the market growth. Nowadays, social media has been largely implemented as an effective mechanism that promotes the advertising goals and strategies of various industry verticals due to the presence of a number of social media users in this region, which may accelerate the regional market growth.