Businesses that cut ad spending in the early days of the pandemic have largely returned to social media. But as 2021 approaches, they will face a series of decisions related to brand safety and privacy that may put their strategies to the test.
What has caused social network ad revenues to rebound?
Consumers continue to use social media at elevated rates, and advertisers seeking reach have few other places to find it. In addition, the social networks have benefited from an overall rise in ecommerce, as well as from marketers’ shift to performance advertising during the pandemic.
How much will marketers spend on social network advertising in the US in 2020 and 2021?
US social network ad spending will rise by 11.4% to just over $40 billion this year. That’s an upgrade from our June forecast, in which we estimated just 4.8% growth in 2020. Next year, spending will rise by 21.3%, reaching nearly $49 billion.
What effect did the July ad boycott have?
While it got a lot of media attention, it did not affect the social properties’ ad revenues. An August study by the Interactive Advertising Bureau (IAB) found that, out of the 46% of US ad buyers who reported pulling social media ad placements, 42% paused them temporarily, and only 4% canceled or planned to cancel them altogether. And the ad boycott may have had an unexpected benefit for social networks, opening up inventory for other advertisers to step in.
What challenges lie ahead for marketers in 2021?
Marketers will be forced to confront the challenges of brand safety and content moderation head-on in 2021 and to determine whether to adjust the way they use social platforms. In addition, privacy-related changes stemming from Apple’s removal of the Identifier for Advertisers (IDFA) will affect mobile marketers’ ability to identify and target their audiences in social media.
WHAT’S IN THIS REPORT? This report analyzes why US social media ad spending has remained strong during the pandemic and discusses what businesses can expect in 2021 after a tumultuous year that also included a racial justice movement and a polarizing US election.
KEY STAT: US social network ad spending will top $40 billion this year and approach $49 billion in 2021. It is growing faster than we had expected earlier in the pandemic.
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