Social media adspend outpaces predictions
Social media adspend is growing faster than initially predicted, according to a recent Forrester report. As a result, Forrester now forecasts that social media adspend will be more than US$101bn by 2021 – a 20% increase on its initial forecast for that year.
Facebook has been a major contributor to this growth, as it is the platform that has the most users and is the most effective at monetising those users. The report attributes the increase in adspend to a number of factors, the first of which is Facebook and Snapchat’s abilities to monetise video effectively, including lengthier video content, particularly on mobile, where Facebook accesses most of its users. Snapchat is expected to carve its own niche in the market, in addition to gaining share from Facebook and Instagram.
The big take-out: Global social media adspend has shown a greater-than-expected increase over the past two years and, as a result, Forrester has adjusted its social media advertising forecast for 2017- 2021.
However, social media platforms are facing some serious challenges, according to the report. Not only is Facebook’s News Feed fast approaching maximum ad load but social media penetration in developed countries such as the US is starting to slow down and though there is potential for growth in lower-penetration markets, it is not growth that can be taken for granted. In Germany and Japan, for example, social media penetration may be lower, but their online adults are some of the least social.
Marketers are becoming increasingly frustrated with the lack of measurement and transparency of ads they place on Facebook, according to the report. It appears, however, that Facebook is responding to their frustrations and is in the process of launching tools that will provide better transparency and accuracy.
When it comes to which devices are favoured most when users access social media content, mobile continues to dominate and drive growth. Social media links most closely with mobile; indeed many social platforms have been designed for mobile. The continued success of social media relies to some degree on the strengthening of mobile capabilities.
Despite the dominance of mobile, the report predicts there will also be growth in personal computers, which will be supported by video.
Notwithstanding the larger-than-expected growth in social adspend and the fact that Forrester has adjusted its growth forecast, the report cautions that social media’s growth in the overall digital adspend landscape in 2021 will increase by only a small amount – from 26% to 29%.