How Social Media Is Driving Global Ad Spend to $745 Billion

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Advertising investment is expected to grow by 9.2% globally in 2022, according to a forecast by Dentsu. The market totaled $682.5 billion in ad spend in 2021, and is on track to hit $745 billion this year.

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2022’s first quarter is anticipated to grow by 8.9%, boosted by the Winter Olympics Beijing, while Q2 and Q3 will be enhanced by mid-term election spend in the US. Towards the end of the year, Q4 is forecast to grow by 9.2% year-on-year driven mainly by the FIFA World Cup Qatar and the holiday season.

The report finds that digital and television continue to be the two powerhouses driving global ad spend, with digital investment forecast to grow by 14.8% in 2022, fueled by video, connected TV, programmatic and e-commerce. This will result in the digital share of spend to 55.5% ($408 billion) of the total ad spend, becoming twice as big as the television share of spend (26.9%) for the first time, it says.

Within digital, marketers will increase their spending on social media advertising by more than 21% this year. The agency further said that ecommerce will be an important driver of this growth as brands seek sales conversions directly within social media apps.

In a discussion at Beet.tv, Sarah Personette, chief customer officer at Twitter, takes this further.

“People on average are expected to be watching over 100 minutes of video online per day, and Twitter is no different,” she told Doug Rozen, CEO, Dentsu Media, Americas. “The surge of live and video on our platform over the last two years has been very similar to that of other platforms.”

What marks Twitter out from other social platforms is its focus on immediacy, she said, giving people a way to see news or sports as it happens and to take part in online discussions about current trends.

“We see a ton of real-time consumption,” Personette said. “We are the ‘home of the highlight’ and we also see that we are the ‘second screen’ and the ‘first scroll.’ ”

A new feature on Twitter, called Spaces, lets users host live audio chats with others to which was recently added a recording feature to re-stream those conversations. The company is working to integrate Spaces with other parts of the platform, she said and to provide more opportunities for advertisers.

“[Brands] can interact in real time with people while they are either hosting a conversation or they’re bringing in somebody else to help host challenging conversations on their behalf.”

In terms of ecommerce, mobile is driving ad sales.

“The way that we think about it is that our shopping experience essentially allows you to watch and experience video live while also buying and browsing those products,” she said.

Twitter has partnered with discount chain Walmart on a live shopping pilot. It included a half-hour variety show hosted by singer Jason Derulo, and featured products for viewers to buy immediately within Twitter’s app. The company says it will continue to push into social commerce as its development teams gather data signals from consumers.

“Live shopping or social shopping is so new in terms of a consumer behavior today,” she said. “At the start of COVID, there were so many different shopping experiences that were immediately launched and I think we have taken a more patient approach.”

Personette added that new Dentsu CEO Parag Agrawal will continue to develop artificial intelligence to help personalize content on the platform.

“He is very, very focused on personalization for better relevancy of the experience that you will have as an individual. It also helps to ensure that everyone has a better advertising experience, too.”