The use of social media has risen sharply over the past few years. In fact, social media engagement went up 61% during the pandemic! With more people staying home glued to their screens during lockdowns, the setting was ripe for increased digital advertising opportunities.
But it took a while for companies to realize this. In reality, most SMBs decreased the pace of social media advertising spending during the first wave of the pandemic, only to increase it later.
Spendesk tracked more than 4,000 SMBs’ social media ad spend from 2019 to 2022 and we noticed a few trends. Using this anonymized data, we took a look at how much companies spend on social media advertising and how different regions compare. Unless otherwise noted, the statistics used in this article come from our survey.
Why advertise on social media in the first place?
- It’s easy to track your return on investment with social media ad spending. Social media platforms provide information on how many views, clicks, and conversions your ads generate. You can see how your ads perform and then decide whether to change tactics, pull the ad, or carry on with your campaign.
- Social media is a great setting for A/B testing. You receive almost immediate feedback (see above) and can tailor your ads to the right audience faster than you would be able to with other forms of advertising.
- Good advertising meets buyers where they are. And people are on their devices all day, every day. This is true for both B2C and B2B audiences, even if the platforms may vary.
- You can cast a wider net on social media and reach an audience you otherwise wouldn’t via traditional marketing channels. There are over four billion people using social media; reaching so many people at once has never been easier. This is also helpful for brand awareness.
Social media ad spending by region
SMBs in France, the UK, and Germany have almost tripled their social media ad spending since the beginning of the pandemic. And just between 2020 and 2021, average social media advertising spend increased 193% across all three regions.
But, there are some interesting differences worth noting:
French companies are embracing social media advertising in a big way.
- Average monthly spending on social media from French companies was up 208% between 2019 and 2022
- French companies spend more on Twitter and Snapchat than German or British companies
Germany’s social ad spending is also increasing.
- Companies in Germany spent less on paid social media compared to other countries before 2020, but now spend more than French or British businesses
- German companies spent 25% more than French firms on social media ads in May 2022
- Meta (Facebook and Instagram) is particularly popular with German companies, who spent three times more on these platforms than French companies in 2021
- German companies are also investing heavily in ads on TikTok, spending more (almost double) than the other regions
UK companies’ social media spending has not been quite as consistent as German and French companies’ spending.
- Total UK social media spending has increased 157% from 2019 to 2022
- But, spending took a nosedive between 2021 and 2022: UK companies are spending 28% less in 2022 on social advertising compared to 2021
- UK companies seem to favor Meta, spending more on Facebook and Instagram than other platforms
These discrepancies could be due to a number of factors, including post-pandemic recovery, regional preferences, and company priorities. It will be interesting to see how social media ad spend will be affected by world events, such as a potential recession or economic downturn.
Which social media platforms do companies use for advertising?
Not all social media platforms are created equal. Depending on their audience, budget, and needs, some companies prefer to spend more on different platforms.
For example, while LinkedIn’s advertising platform is used by the highest number of businesses, companies tend to spend far more on Meta platforms (Facebook and Instagram).
What's the fastest-growing platform for social media ads?
TikTok was the big winner of the pandemic period, and we’re not just talking about all those viral dance moves. Companies increased their ad spending on TikTok by more than 5,000% from 2020 to 2022!
Only 3% of companies in the survey use TikTok, but those who do invest heavily in the platform. Their average spend is €11,420 per company! This shows it’s a promising channel that will likely continue to grow.
Here are some interesting statistics per platform:
- €11,420 monthly average spend per company in 2021
- Only 3% of companies spend on TikTok
- As of May 2022, almost double the number of companies pay for TikTok ads than for Twitter, Pinterest and Snapchat
- TikTok is poised to surpass Twitter, Pinterest, and Snapchat in revenue in 2022 (Shopify)
Meta (Facebook + Instagram)
- €15,697 monthly average spend per company in 2021
- Average spend per customer grew 301% from 2019 to 2022
- Meta may lose up to $10 billion U.S. dollars in ad revenue due to Apple allowing users to block in-app tracking (Digiday)
- Meta’s main source of revenue is digital advertising, and they generated $117 billion in 2021 (The Social Shepherd)
- €4,574 monthly average spend per company in 2021
- Twitter is expected to grow to 329 million users this year (Hootsuite)
- In 2021, 92% of Twitter’s revenue came from ads (Business of Apps)
- €2,014 monthly average spend per company in 2021
- Cost per click is higher on LinkedIn than Instagram, Facebook, and Twitter (Brandwatch)
- There are 822 million registered users on LinkedIn (Business of Apps)
- LinkedIn’s engagement reached a record high in 2021 thanks to the fluctuating job market (Business Insider)
Google (YouTube + Google Ads)
- €11,175 monthly average spend per company in 2021
- 28% of companies spend money on Google Ads and YouTube
- From 2019 to 2022, ad spending on Google increased by 583%
- YouTube’s global advertising revenue dropped in 2022 (Statista)
Companies spend around the same amount on TikTok as they do on Google platforms. This is amazing considering that TikTok is a relatively new channel.
👀 Are you looking to advertise on LinkedIn specifically and need in-depth guidance? Read our article How to plan your LinkedIn marketing budget to maximize results!
Tracking social media spend
We can’t really talk about social media ad spending without bringing up budgets and budgeting best practices. Like all your other spending, you need 100% visibility on your social media advertising budget.
Tracking in real time is also a crucial factor for staying on top of your expenses.
Naturally, a smart spend management tool such as Spendesk is a lifesaver for busy teams who need to keep an eye on their budgets. Plus, it helps automate administrative tasks to save time and avoid manual errors. What more could you ask for?