What’s Happening:

The June/July 2019 issue of Global Ad Trends from WARC Data reveals recent developments in social media, primarily the slowdown of ad revenue and user growth among platforms while spending is up, and continued issues of trust and security with social media networks. 

Why it Matters:

Digital paywalls have grown in popularity, reaching two-thirds of print newspapers and magazines this year. Paywalled news is also becoming more expensive in most markets, averaging €14.12 per month, with the most expensive being in the U.K. at an average €17.45 per month. Yet publishers continue to struggle for profitability — and platforms such as the Facebook/Google duopoly being largely blamed for hoarded a lion’s share of digital ad money.

WARC’s data looked at six major social platforms: Facebook, WeChat/QQ, Twitter, Weibo, Snap and Pinterest. While their combined ad revenues rose 26.2% year-on-year during the first quarter of 2019 to reach $17.9 billion (the second-highest total on record), it was roughly half the rate of expansion from one year earlier (51.6%).

Digging Deeper:

Consumers still exhibit strong feelings of distrust when it comes to social media.

  • 70% of consumers in the U.S. and 82% in the U.K. do not trust information that comes from social media sites. The biggest cause of this distrust stems from the misuse of personal data.
  • Half of all consumers believe that social media and tech companies have too much power and influence in their daily lives.
  • Just over 42% of respondents trust influencers’ opinions, a rate which has steadily tracked downwards since 2014. 

When it comes to online ads and shopping, WARC provided some key data in current trends:

  • Just over 71% cite security as their greatest concern with regard to social shopping.
  • A range of industry responses has been introduced to combat ad fraud, from optimization to third-party verification. 
  • Advertising fraud losses dropped to a new low, under $6 billion worldwide, attributed largely to increased verification and industry collaboration.
  • The digital advertising market continues to grow at a rapid pace and is forecast to account for more than half of all media spend by 2020.

The Bottom Line:

Global advertising spend is expected to rise 3.6% in dollar terms this year, which represents a slowdown from the 5.3% growth rate that was estimated in 2018. One reason cited for this slowdown is the lack of cyclical sporting and political events, particularly in the U.S.

Continuing to build trust with consumers, and to build marketing and revenue strategies outside of social media, will be important aspects for digital publishers to focus on.

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