Daily Brief:
- Facebook’s global advertising revenue is forecast to surpass $100 billion in 2024, according to WARC Media’s latest “Platform Insights” report. If achieved, that would make the Meta-owned platform the second media brand after Google to exceed $100 billion in ad revenue.
- In the U.S., advertising spend on Facebook is forecast to reach $39.5 billion in 2024, an 11.6% year-over-year increase. Supporting the social media platform’s ad revenue growth are its investments in artificial intelligence (AI) and commerce.
- Still, Facebook’s share of the global social market is shrinking and is expected to fall from nearly 89% in 2013 to 38.2% by 2025. A predicted slowdown in ad revenue growth for Facebook in 2025 and 2026 comes as Instagram is expected to record near-20% growth.
Dive Insight:
Facebook is on track to achieve a major feat this year in surpassing $100 billion in global ad revenue, a milestone that would place it alongside Google as the only other media brand to have done so. The Meta-owned platform is one of the most popular digital platforms in the world, WARC outlined, with 3 billion monthly users and a global advertising audience of 2.2 billion.
Behind its growth are ongoing bets on commerce and AI. Meta has prioritized building out its Advantage+ suite of ad products, which rely on automation, and earlier this year debuted image and text generators that can help produce creative content. Meta’s AI tools, like its Advantage+ Shopping Campaigns, have driven a 12% improvement in return-on-ad-spend (ROAS) in two years, per Meta research cited in the WARC report. Additionally, brands using Meta’s image generation tool are reporting a +7% increase in conversions, per the company.
Over a million advertisers used Meta’s AI tools over the last month, per WARC, and investment by retailers is forecast to top $20 billion this year. Brands from Asia are spending more on advertising on Meta platforms including Facebook, according to WARC, but they are targeting users in other regions, a trend that has been growing over the last 12 months.
Meta grew revenue by 19% YoY to $40.59 billion in Q3, according to an earnings statement. While the company doesn’t split revenue by platform, WARC forecasts that Facebook’s Q3 ad revenue grew 13.2% YoY. By 2026, Facebook’s ad revenue is expected to surpass $112.8 billion.
Still, Facebook’s ad revenue growth is expected to slow in 2025 and 2026 as its share of the global social market dwindles. This comes as platforms like Instagram and ByteDance’s TikTok continue to capture the attention of coveted audiences like Gen Z, though the latter is continuing to battle a potential ban in the U.S. Though over three-quarters of U.S. adults use Facebook, per GWI, the platform trails behind platforms Instagram, TikTok and Snapchat in usage by Gen Z.
While Facebook is seeing slowed growth, its ads business is still twice the size of the U.S. over-the-top market. It is also four times that of TikTok, per WARC, and the platform commands a 29% share of U.S. retailer spend, per Sensor Tower data cited in the report. In Q4, Meta expects revenue in the range of $45 billion to $48 billion.
