Market Insights Digital Digital Advertising

Social Media Advertising - Luxembourg

Luxembourg

Ad spending in the Social Media Advertising market is projected to reach US$92.6m in 2024.
Ad spending is expected to show an annual growth rate (CAGR 2024-2028) of 4.50%, resulting in a projected market volume of US$110.4m by 2028.
In global comparison, most ad spending will be generated in the United States (US$76,400m in 2024).
In the Social Media Advertising market, US$110.4m of total ad spending will be generated through mobile in 2028.
In the Social Media Advertising market, the number of users is expected to amount to 636.6k users by 2028.

Key regions: Japan, United Kingdom, India, United States, Australia

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Analyst Opinion

The global number of social media users reached 4.2 billion in 2021 and is projected to increase to 5.8 billion users by 2027. Social media has increasingly impacted our daily lives since its emergence in 2005. Unsurprisingly, marketers now use social media as their main method of advertising. They spend a significant amount of money to reach consumers on social media and are constantly thinking of new, creative methods to improve their social media advertising strategies.

The development of the internet infrastructure and the accessibility of smartphones are the main forces behind the expansion of social media advertising. Over the past ten years, the internet infrastructure has undergone a significant transformation. It is now quicker, less expensive, and more accessible. While smartphones have gotten cheaper over time, they were a luxury item for professionals less than 20 years ago. Nowadays, people use their smartphones daily, which has led to a substantial rise in social media usage.

Social media advertising had been expanding since before the COVID-19 pandemic. However, the pandemic has increased the usage of social media, especially for video content, which has caused exponential growth in social media advertising. People are spending increasingly more time on social media, mainly due to TikTok’s boom during the pandemic and the significant increase in Instagram’s video content. Thanks to this increased content consumption, social media advertising has grown significantly.

Methodology

Data coverage:

Data encompasses enterprises (B2B). Figures are based on social media advertising spending and exclude agency commissions, rebates, production costs, and taxes. The market covers social media advertising generated by social networks or business networks such as Facebook, Tiktok, Instragram, Pinterest, and LinkedIn.

Modeling approach:

A combined top-down and bottom-up approach determines the market size. Starting with the top-down approach, we calculate global social media advertising by aggregating revenues from key players (Meta Platforms (Facebook and Instagram), ByteDance (Tiktok and Douyin), Twitter, Snapchat, and Microsoft (LinkedIn)). This is followed by the bottom-up approach to calculate and identify relevant key market indicators such as social media users, web traffic, the number of app downloads, GDP, and digital consumer spending by country. We can estimate global search advertising and then distribute it to each country individually with relevant indicators by combining the two approaches.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market. For instance, the S-curve function is well suited to forecast digital products due to the non-linear growth of technology adoption, whereas exponential trend smoothing (ETS) is more suited for projecting steady growth in traditional advertising markets.

Additional notes:

Data is modeled using current exchange rates. The impacts of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice per year in case market dynamics change.