Taboola has found that three-quarters of marketers are experiencing diminishing returns on social platforms in a new survey of 300 brands and agencies in the US in partnership with Qualtrics.
Performance advertising on social media is rapidly growing—industry forecasts predict that social media ad spend will reach $239 billion in 2025 and is projected to reach $273 billion in 2026.
Most of the performance marketers indicated that diminishing returns impact over 30 per cent of their spend. They attribute this to ad fatigue and audience saturation. They also said rising costs didn’t help.
However, while these social ads are under-performing, two-thirds said they are changing audience targeting strategies and three-fifths said they were testing new ad formats.
Fifty-five per cent of marketers said that they were expanding into other channels beyond social media ads to drive performance.
“While social media accounts for a large portion of performance advertising budgets, many marketers have hit a barrier in the form of diminishing returns,” said Adam Singolda, CEO of Taboola. “More spend just isn’t translating into better results. The findings in this report point to difficulty in sustaining performance over time, with marketers seeking solutions that can help them overcome that barrier.”
