Social network advertising spending is past its peak

According to an analysis, the growth rate of social network advertisement spending, which had been steadily upward, has been on the decline since last year.?

Market research firm Insider Intelligence said in a recently released "Paid Advertising on Social Media" report that social network advertising spending reached $65.31 billion (about 83.3943 trillion won) last year, ending a decade of double-digit growth. The growth rate in 2022 was only 3.6% year-on-year.?

Although the growth rate is expected to recover as advertising for short-form video platforms such as TikTok increases, USD 79.28 billion (about KRW 101.2326 trillion), which is expected to be global SNS advertising in 2024, is more than USD 20 billion lower than expected in March 2022. Among them, advertising spending related to social network videos was expected to be $39.82 billion (about 50.89 trillion won) in 2022, but in reality, it was $33.98 billion (about 43.4264 trillion won), far below expectations.?

The report first mentioned Apple's "App Tracking Transparency" as the background of the frozen advertising market. In order to track the user's data in the app, there is a part that is impossible to market in the existing way, requiring individual consent. On top of that, it is explained that the atmosphere cooling has accelerated due to continuous inflation, rising interest rates, supply chain disruptions, and the war between Russia and Ukraine.?

The cost of paid advertising on social media platforms can vary greatly depending on various factors such as the type of social media platform, advertising type, target customers, and bidding strategy. The report noted that advertisers may also be charged based on pre-specified campaign goals, such as exposure (CPM), response (CPA), and click (CPC).??

According to 2022 data from marketing agency VaynerMedia, TikTok is offering lower advertising rates than competitive platforms. TikTok's video advertising CPM cost is about half that of Instagram Reels, and it was about 30% cheaper than Twitter. Biner Media expects TikTok to become more active as TikTok is increasing its reach rate at a low price.?

If you are considering social network advertisements, you should also be careful about choosing a platform. It is also important to analyze and approach the platform mainly used by target consumers, but it is also necessary to pay attention to the growth prospects and risks of the platform.?

The report noted that Facebook is currently the world's largest social network platform, but users are leaving quickly, and usage time is decreasing. Twitter is the most unstable SNS. After Elon Musk acquired Twitter, there was a big change in platform and content operations, resulting in a rapid increase in advertisers' departure. Twitter's advertising revenue for the fourth quarter of 2022 fell 35% year-on-year.?

TikTok is highly regarded for its growth potential, but political instability remains. The report noted that TikTok is reorganizing the digital advertising market, but it cannot rule out the possibility of U.S. government intervening.