In just five years, brands and companies worldwide have spent a mind-blowing $1.1 trillion on social media ads, with annual spending more than doubling from $125 billion in 2020 to a projected $275 billion in 2025. While the annual growth has significantly slowed since the market peak between 2018 and 2020, the momentum is far from over, with the industry set to reach another major milestone in the years to come.
According to data presented by Jemlit.com, social media ad spending is expected to grow by almost 90% in the following years and become a half-a-trillion dollar industry by 2031.
Brands to Pour $40 Billion More Into Social Media Ads Each Year
Social media ads have an enormous impact on purchasing decisions among younger generations. In 2024, more than 75% of Gen Zers and 50% of Millennials decided to buy a product or service after seeing it on social media platforms, which is why brands continue to pour billions of dollars into this type of advertising, making it the second-largest revenue stream in the digital advertising industry.
The amount of money they put into social media ads each year has snowballed over time, and this trend shows no signs of slowing down any time soon. According to Statista` Market Forecast, just five years ago, brands and companies were spending roughly $150 billion less on social media ads than they`re expected to this year, or $125 billion in total. Today, that figure stands at over $275 billion.
The surge in ad spending becomes even clearer when looked at on a yearly basis. In 2018 and 2019, annual spending on social media ads rose by roughly $20 billion each year. Just a year later, the figure increased to $31 billion, and by 2021, it hit $39 billion. After a temporary slowdown in 2022, which still resulted in an $8 billion increase, growth resumed, with ad spending climbing by $28 billion in 2023 and another $36 billion in 2024.
Moreover, Statista expects this trend to accelerate from 2025 forward. After rising to $38.5 billion in 2025, the annual spending is projected to grow by more than $40 billion in 2026 and maintain that pace through the end of the decade. This impressive double-digit increase will help the social media advertising industry reach a new significant milestone; at this rate, it will become a half-a-trillion-dollar industry in 2031, with brands pouring $520 billion into social media ads that year alone.
Social Media Ad Reach to Hit 6.6 Billion Users by the End of the Decade
The key driver behind this impressive growth, and the main reason why social media ad spending keeps rising, is the ever-growing user base. More social media users mean more impressions and more potential buyers, and this number is expected to grow significantly over the next five years.
According to Statista, social media ads could potentially reach around 5.4 billion people in 2025, roughly 300 million more than last year and 1.7 billion more than just five years ago. By 2030, that figure is expected to increase by another 1.2 billion, pushing the potential social media ad reach to over 6.6 billion users.