While many advertising mediums suffered the negative impact of the pandemic in 2020, social media ad revenues continued to grow significantly. Amid this growth, the triopoly (Facebook, Google and Amazon) continue to secure a hefty share of ad dollars, per data from eMarketer.
eMarketer estimates that Facebook, as a whole, will bring in $50.3 billion in net ad revenue (ad revenues after companies pay traffic acquisition costs to partner sites) this year. And, after experiencing significant growth in ad spending in the past few years, US Instagram ad revenues are expected to grow a full 52% year-over-year (y-o-y) to reach more than $26 billion. This growth will help push Instagram past the halfway mark and account for an estimated 52.6% of total US Facebook ad revenues this year.
Separate data from eMarketer shows that, this year, Facebook is expected to account for 23.8% of total US digital ad spending. According to these combined figures, this means that Instagram will account for roughly 13% of total digital ad spending in the US this year.
eMarketer does point out that Instagram could be affected by the fallout of recent reports that criticize its impact on teens’ mental health. Indeed, a recent survey from Harris Poll and Ad Age indicates that a fair share of Instagram users with knowledge of the controversy are likely to stop their or their children’s use of the platform because of the effect on youth mental health. However, eMarketer notes that “elevated levels of digital ad spend across social media will continue to drive Instagram’s ad revenues in a positive direction for Facebook at large.”
As such, US Instagram net ad revenues are expected to continue to see growth at least for the next two years, albeit at a slower rate than seen in recent years. And, by 2023, Instagram is expected to account for 60.9% of total US Facebook net revenues.
Triopoly Expected to Account for Two-Thirds of Digital Ad Spend in the US
After growing by an estimated 38.3% y-o-y, total US digital ad spending is forecast to reach $211.2 billion this year. It’s worth noting that this level of growth was more than expected – considering this most recent estimate is $20 billion more than eMarketer’s forecast in March 2021, and $40 billion more than estimated in October 2020.
The majority of this ad spend will be distributed between the triopoly of Google, Facebook and Amazon. These companies will account for 64% of total US digital ad revenue this year. Of note, while Amazon has lagged behind Google and Facebook in ad revenues, it has seen its share of digital ad revenues increase of late. Last year, Amazon accounted for a little more than 10% of total digital ad revenues in the US, while this year it is expected to account for 11.6%. And, by 2023, eMarketer forecasts it will make up 14.6% of total digital ad spending in the US.