Insider Intelligence Slashes 2022 Ad Spending Forecast by Nearly 6 Percent

Total digital ad spending worldwide will not grow as robustly over the next two years as Insider Intelligence expected in the Q1 forecast. They now project 2022 digital ad spending worldwide to reach $567.49 billion, up 8.6% over 2021.

In the previous forecast, they expected a 15.6% growth to $602.25 billion. Q1 forecast predicted digital ad spending worldwide would reach $756.47 billion by 2024, but is now expected to reach only $695.96 billion. Some digital platforms will be hit harder than others in terms of total ad revenues. However, as the entire digital ad pie shrinks, each player’s share of the market will remain relatively unchanged since the Q1 forecast.

“Economic instability across the globe will lead to lower growth by the end of the year,“ said Oscar Bruce Jr., senior forecasting analyst at Insider Intelligence. “China, the second-biggest digital ad market, will post its lowest digital ad growth on record as it deals with tougher regulations and economic headwinds. Europe will see declines in digital ad spend in US dollars given the relative weakness of the local currencies and the economic impact of the war in Ukraine.“

The biggest downward adjustment was made to the Twitter ad forecast, partly due to the overall slowdown in the ad market but also due to the changes Elon Musk is making to the platform. Through the forecast period ending in 2024, Insider Intelligence cuts the outlook for the social network’s ad business by 39.1%. Twitter’s ad revenues worldwide are now expected to grow just 4.9% to $4.67 billion this year. Q1 forecast had its revenues growing 25.1% to $5.58 billion, then jumping another 21.6% in 2023 and 16.0% in 2024. The growth is now projected to be essentially flat for the next two years.

Meta’s ad business worldwide is expected to drop for the first time ever. The new forecast has Meta generating $112.68 billion in digital ad revenues worldwide in 2022, a drop of 2.0% from 2021, and down significantly from the Q1 forecast of $129.16 billion. Looking forward, the ad spending forecast for the social network company is lowered through 2024 by nearly 20%.

Instagram’s ad revenues worldwide will fare better but will still grow at a rate significantly lower than its recent history, just 2.6% this year after a 50.2% increase in 2021. The current forecast has Instagram hitting $43.28 billion in digital ad revenues worldwide this year, compared with the $54.16 billion expected in the Q1 forecast. By 2024, its ad revenues will reach $59.61 billion, which is more than 27% lower than the Q1 projection.

Facebook alone will reach $69.41 billion in digital ad revenues worldwide, lower than the $75.00 billion projected. The latest 2022 figure represents the first-ever decline in ad revenues worldwide for Facebook, down 4.6% from 2021. Growth will turn positive again next year, but with tempered expectations. The current forecast projects Facebook will reach $75.11 billion in ad revenues worldwide in 2024, which is more than $10 billion lower than the Q1 projection.

Snapchat will also be hit hard by the economic slowdown and is expected to generate $3.97 billion in total ad revenues worldwide this year, up 17.1% over 2021 but below the Q1 expectation of $4.86 billion. Snap’s global ad business is expected to grow to $5.81 billion in 2024, 33.6% below the Q1 forecast of $8.75 billion.

Even TikTok, the red-hot favorite of the social networks among Gen Z, will see its ad business take a hit in the coming years. Its global ad revenues are expected to reach $9.89 billion this year, up 155.0% over 2021 but below the Q1 expectation of $11.64 billion. TikTok will continue to grow robustly, albeit at a slower pace than previously expected.

Insider Intelligence lowered its forecast for Google’s ad spending worldwide, the adjustment was small compared with its competitors, as the main driver of its ad business—search—remains more insulated from the challenges facing rivals who rely more on display ads. They now expect Google to generate $168.44 billion in net digital ad revenues worldwide this year, down from the Q1 expectation of $174.81 billion. By 2024, Google’s ad business will reach $201.05 billion, just 2.8% below Q1 expectations.

Amazon, whose ad business has grown dramatically over the past several years, will also take a hit. Its 2022 global ad revenues are expected to grow 21.9% to reach $37.99 billion, down slightly from the Q1 forecast of $41.75 billion. Looking ahead to 2024, Amazon will reach $55.99 billion in digital ad revenues worldwide, down from the projected $63.48 billion in the Q1 forecast.