The evolution of the social network advertising market and how to adapt your strategy to take advantage of it
A guide from Icarus Media Digital
There is no getting away from the fact that social networks are a prominent and growing route to reaching new and existing clients. According to data from Statista, the global social media advertising market was valued at USD 181.2 billion in 2021 and is predicted to scale to $358 billion by 2026.
At Icarus Media Digital, we transform ideas into successful, scalable businesses, and social network advertising plays a significant role in that transformation process.
Advertising on social networks is a fast and effective strategy for many business goals, including building brand awareness and messaging on differentiation, creating new leads, signing new clients and launching new products and services.
Social networks are opening up an increasing number of channels and media options for advertising, with highly targeted audiences, while also seeing increasing active users and reach globally.
The evolution of social network advertising
The earliest online social networks were dating sites and online forums. Friendster, LiveJournal and Six Degrees were amongst the earliest platforms that gained popularity.
LinkedIn, founded in 2002, became the go-to network for professional networking and career-focused conversations.
Facebook, launched in 2004, set the tone for advertising through social networks when it launched Facebook Ads in 2006. At the same time, businesses were building their social media presence and connecting with audiences online.
Compared to traditional offline media such as television and newspaper ads, social network advertising provided the opportunity to have a much higher degree of campaign targeting, better performance evaluation and the ability to collect consumer data.
One of the most iconic early Facebook Ads campaigns was Coca-Cola’s Share a Coke campaign, which enabled individuals to create customised coke bottles and share virtual cans.
Social media influencers began to arise in 2009, providing brands with other ways to promote themselves and build trust with already engaged audiences.
It’s an ever-evolving landscape with networks gaining and losing popularity. For example, Myspace launched in 2003 and, by 2006, was the most visited website, and then ultimately was overtaken by Facebook.
BeReal is a relatively new network that has gained traction in 2022. It encourages users to take photos of their surroundings during a randomly selected two-minute daily window. The app aims to be more authentic than sites with more staged content like Instagram.
Alongside new entrants, existing social networks regularly develop their functionality to keep people on their sites longer and stay relevant against the competition. For example, Instagram and Facebook have responded to the popularity of TikTok by launching short-form video content called Reels.
Advertising market share on social networks
Facebook and Instagram
Facebook and Instagram, owned by Meta, remain the most popular social networks for advertising, with a combined market share of around 45%. Both platforms offer various multi-media options for advertising, from photo and video post ads to advertising via stories.
Facebook remains the most-used social network, with 1.96 billion daily active users in Q2 2022. As of January 2022, Instagram was the fourth most popular social network by monthly users, behind YouTube and WhatsApp.
These impressive user numbers demonstrate the scale of the opportunity for advertising on both platforms, especially for brands seeking to connect directly with consumers.
TikTok
TikTok, owned by ByteDance, has seen fast growth and now attracts around 25% of the market share of social network advertising spend.
While it started as a site for sharing videos of people dancing and lip-syncing, TikTok is now used by brands globally to build awareness and sell.
As of January 2022, TikTok had 1.39 billion users, with speculation that it could reach 1.8 billion by year-end. Data also suggests it has a higher engagement rate on content than other social networks.
Studies suggest advertising on the platform is cost-effective against other options. However, TikTok’s user demographics are younger than platforms such as Instagram and Facebook, so it’s crucial to check if it’s a good fit to reach your target clients.
Others
Snapchat, LinkedIn and Tencent-owned WeChat now share 5% of the social network advertising market each, with each site bringing specific pros, cons and demographics. For example, Snapchat is popular amongst Gen Z and millennials for social content, LinkedIn has a business and professional network focus, and WeChat is a Chinese social network complete with instant messaging and integrated mobile payments.
Geography
The United States is currently the biggest market for social media advertising, and there is speculation that China may overtake it.
Social network audience
The world population stands at 7.98 billion people at the time of writing this article.
According to data from the Digital 2022 July Global Datashot Report, 59% of the global population are active social media users, 45.7% female and 54.3% male, spending an average of 2 hours 29 minutes per day on social networks.
These statistics highlight the scale of the opportunity for businesses to reach their target audience globally through social media advertising.
Making the most of the social network advertising opportunity
Social network advertising is an essential consideration for any business advertising budget.
Social media advertising that converts can bring almost instant results in brand awareness, leads and clients. In contrast, strategies such as search engine-optimised content and growth through organic social media content are longer-term strategies.
Here are some considerations to maximise your return from incorporating social media advertising in your marketing strategy:
● Stay up-to-date with how social networks are evolving and the results your business is achieving. Profitability for different audiences fluctuates over time by platform, and new opportunities emerge constantly.
● Invest in internal resources or work with external experts to keep up-to-date with where and how your target clients engage through social networks. Social media advertising allows you to target new leads and your existing clients at a granular level.
● Set a specific business goal for each social network advertising campaign. Are you driving brand awareness? Collecting leads? Driving direct sales?
● Set and track KPIs that determine how far you are meeting the agreed goals.
● Determine a budget for social media advertising. Start with a small budget to test each campaign and ensure it converts before scaling it.
● Test variations of your adverts with A/B testing to track results and maximise conversion.
● Design an advertising approach specifically for each social network and ensure every design is mobile-friendly.
● Stay true to your brand and values when assessing new opportunities for engagement through social media to ensure they support the reputation you have built. Being part of the latest trend is only worthwhile when it’s congruent with your brand and mission.
Well-executed social media advertising is a powerful investment in brand awareness and direct revenue generation. The usage of social networks and opportunities to advertise through them are growing.
At Icarus Media Digital, we invest significant time and resources in staying up-to-date with social network developments and making social media advertising a core element of our successful marketing strategy for scaling businesses.
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