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Paid social: Ad loads climb while lower-funnel formats gain importance

Social media networks are cramming more ads onto their platforms. For most of social media’s history, platforms have been very cautious about increasing their ad loads. But with easy user growth drying up in their most valuable markets—and advertisers still coping with post-ATT signal loss—they are ramping up their ad loads to drive revenues.

All this energy is being exerted just to meet what are historically modest expectations: We expect US social network ad spending to increase just 3.4% in 2023.

Commerce continues to look like a top priority. Between the TikTok Shopping Center, Meta’s continued emphasis on Advantage+ Shopping Campaigns (ASC+), as well as platforms such as Snapchat and Pinterest reorienting their machine learning and AI systems to drive commerce outcomes, social networks continue to focus on lower-funnel ads.

KEY STAT: Thanks to a flood of new inventory, some of it in unfamiliar places, CPMs and CTRs have been either flat or declined YoY in each of the past four quarters—with CPMs dropping 29% in Q2 2023 alone—according to Skai.