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Instagram Ad Spend On Track To Surpass Facebook (Via MediaPost)

Instagram Ad Spend On Track To Surpass Facebook (Via MediaPost)

© Media Post

Meta’s Instagram is recovering more quickly than other social media from the effects of Apple’s ATT iOS data-sharing opt-in and the soft digital ad market, putting it on track to surpass Meta’s Facebook in the near future, according to a new forecast.

Due to improved monetization of its short-form video format Reels, along with AI targeting innovations that are boosting content recommendation, asset creation and consumption levels to help offset ATT’s impacts, “it’s only a matter of time before Instagram surpasses its Meta stablemate Facebook to become the world’s largest social media platform by ad revenue,” predicts Alex Brownsell, head of content at WARC Media. That’s despite Facebook’s own significant ad-revenue recovery during the past year.

Even in 2022’s generally flat digital ad market, Instagram managed 5.8% global ad revenue growth.

The WARC forecast for the platform calls for 19.7% year-over-year growth, to reach $61.1 billion, in 2023. That includes 25.8% YoY growth in Q4, for quarterly revenue of $17.7 billion.

For 2024, the outlook calls for 16% growth, to reach $70.9 billion.

(In comparison, in December 2022, prior to the digital advertising rebound, eMarketer forecast that thanks to its faster growth than Facebook, Instagram’s ad revenue would reach $50.58 billion in 2023 and $59.61 billion in 2024, to Facebook’s $71.32 billion and $75.11 billion, respectively.)

With the growing popularity of social commerce driving Instagram closer to point-of-purchase, WARC forecasts that retail ad spend on the platform will rise from $3.2 billion in 2020 to $9.1 billion in 2024. In addition, business/industrial ad spend on Instagram is forecast to reach $10.2 billion globally in 2024.

The report cites the platform’s multiple strengths, starting with GWI research showing that nearly a third (30.4%) of consumers now use Instagram when searching for brands.

Meta’s Reels push has proved a major success in driving interaction and advertising.

While Instagram’s global monthly advertising reach has remained at 1.3 billion over the past two years, just slightly ahead of TikTok, Reels is driving more than 200 billion plays per day across Meta assets, according to Kepios.

Campaigns on Reels reach nearly twice the audience of TikTok campaigns, according to data from Emplifi, which found that Reels outperforms all other content types on Instagram, generating 55% more interactions than single-image posts and 29% more than standard video posts.  

Also thanks largely to Reels, Instagram’s use among Gen Zs and Millennials has increased over the past year. The platform now reaches 60% of these younger audiences, versus 38% each for both Facebook and TikTok.

Even with growing competition from TikTok for creators, Instagram is used by 90% of influencers, compared to 63% using TikTok.

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