Forecast: Social Media Ad Revenue at $640bn by 2030

Why It Matters

The surge underscores social media’s expanding role as a primary ad channel, reshaping budgets and pressuring rivals lacking deep data assets. Brands must adapt to video‑centric, AI‑driven buying while safeguarding user experience.

Key Takeaways

• Social media ad spend projected $640 bn by 2030
• CAGR 12% over next five years
• Video ads will make up 60% of revenue by 2025
• Six apps generate 90% of global social ad revenue
• AI targeting favors walled‑garden platforms, limiting smaller competitors

Pulse Analysis

The projected $640 billion social media ad market reflects a broader shift in digital advertising strategy. As brands chase higher engagement, they are allocating more spend to platforms that combine reach with sophisticated targeting. Omdia’s forecast shows the sector’s share of total online ads climbing to 44% by 2030, eclipsing traditional display and search channels. This growth is fueled by a 12% compound annual growth rate, positioning social media alongside retail media as one of the fastest‑growing ad segments.

Video content is the engine driving this expansion. Formats such as Reels, TikTok Shorts and Instagram Stories are now the preferred inventory for advertisers, projected to represent 60% of social ad revenue by 2025. The rise of self‑serve tools and integrated commerce features enables brands to run full‑funnel campaigns directly within the platform, siphoning budgets from publishers and broadcasters. Higher‑value video ad loads and clearer segmentation between performance‑driven and premium placements further enhance monetisation opportunities.

However, the market remains highly concentrated. Six apps—Facebook, Instagram, Douyin, YouTube, TikTok and WeChat—account for roughly 90% of global spend, with Meta alone capturing over half. AI‑driven targeting and recommendation algorithms give these walled‑garden platforms a decisive edge, marginalising smaller competitors. To sustain growth, they must balance aggressive monetisation with user experience, avoiding feed saturation that could erode engagement. Brands and investors alike should monitor how these platforms evolve their ad products and data policies, as they will shape the future of digital marketing.