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With user penetration nearly complete and time spent starting to plateau or decline on many platforms, social networks have run out of easy paths to incremental budget among their advertisers.

CPG brands are abandoning Facebook ads while ramping up their TikTok spend. As Facebook loses relevance with younger audiences, D2C ad budgets for CPG brands are diversifying into emerging channels. Facebook is losing share of CPG and beauty brands’ D2C ad spending fast. The platform’s share declined from 52.6% in Q1 2020 to 30.2% in Q4 2022, according to an April 2023 study by Rockerbox.

Nine in 10 consumers worldwide have a profile on Facebook, according to a January report from Sprout Social.

That’s likely one reason why Meta folded Messenger back into Facebook. Sharing videos via DM is problematic for short-video advertisers. Short-video ads are served primarily between videos, limiting where users can see those ads. Content shared via DM, for example, appears in isolation. Marketers have few paid options to reach users in DMs overall.

On today's podcast episode, we discuss why a surprising amount of people think Meta's Orion smart glasses are the future of computing, whether people will turn to Amazon for live news, what's happening to the middle of the market, why screensaver ads can have a significant impact, who was the richest American in history, and more. Tune in to the discussion with host Marcus Johnson, director of reports editing Rahul Chadha, and analysts Bill Fisher and Max Willens.

Our take: For brands and advertisers, particularly in the travel and auto sectors, using social commerce strategies across various platforms can help connect with consumers at each stage of the buying journey, from ideation to the point of transaction.

As social messaging takes off, marketers are trying to figure out how to show up within that context, whether through advertising, shareable posts, or customer service.

The trend: Healthcare advertising motivates consumers to go online to do more research, or talk to a medical professional—but the majority of people have privacy concerns about personalized ads. Our take: Healthcare marketers are eager to use AI and targeting technology to make one-to-one connections with consumers. And it’s true that personalized ads can be more useful for people. However, marketers need to use transparent labeling, use conspicuous ad tags on social media, and preface targeted emails with explanations about why they’re being sent.

Other Meta updates:. Video ads on Threads. This builds off of its global expansion of static ads, which launched in April. Trends in Instagram’s Creator Marketplace. It lets influencers and content creators monitor which topics are trending and where to maximize content performance. Ads in trending Reels. This places ads in popular creators’ Reels to help advertisers reach large audiences.

Instagram is keeping Meta relevant to Gen Z. Despite the massive influence of TikTok, Instagram remains just as relevant as a discovery platform for Gen Z. But only 25.8% of Gen Z respondents said they typically discovered new brands and products on Facebook. Social activities: Gen Z prefers video and influencer content. Video is the top activity for discovery on social media.

The Google-Meta duopoly will account for 57.5% of digital ad spending in 2024, while retail media will account for 20.8%. For consumer packaged goods (CPG) advertisers, retail media will become a key piece of search and display expenditures.

Our view: Uncertainty around TikTok and Meta are spurring further diversification in the ad market. While Meta and Google will remain the largest ad platforms—as well as the biggest financial beneficiaries of a TikTok ban—advertisers are looking for alternative places to spend their dollars. This was originally featured in the Ä¢¹½AV Daily newsletter.

As legal disputes over AI copyright begin to gain some clarity, advertiser adoption of generative AI is likely to increase. Use of AI is already commonplace in advertising, but AI creative features offered by major ad platforms like Google and Meta could give advertisers pause due to uncertainties around their training material.

Who’s winning: LinkedIn and Meta are set to dominate B2B social ad spending, which will account for 46.3% of digital B2B ad spending. LinkedIn continues to be the main platform for digital B2B ads; 90% of its ads are B2B-focused.

Retail media networks will challenge Google and Meta, and offer retailers serious margins.

Other similar platforms are getting extra attention: Bluesky saw a strong surge in sign-ups last year and is mulling advertising, while Meta claims that Threads is attracting 1 million new users per day.

However, when asked which platform consumers are most engaged with, Facebook came out on top. The bottom line: UGC is a powerful tool for boosting consumer engagement and trust, and it can lead to purchases down the line. However, for maximum effectiveness, brands should be leveraging UGC outside of owned channels, specifically on platforms where they know consumers are engaged.

Similarly, publishers’ ad spending on Instagram is decreasing, with 55% purchasing ads in the past month, down from 61% last year. Publishers have reduced daily postings on Instagram, with 52% saying they post content daily, down from 69% last year—although weekly postings rose to 45% from around one-third in previous years.

Meta banned political advertisers from using its genAI tools but still allowed political ads on its Facebook and Instagram platforms. What were the stakes? 46% of adults ages 18 to 29 use social media as their main source for political and election news, per the Pew Research Center.