July 28, 2023

Are We All Overspending on Meta? (Or Is It Just That Much Better?)

Frankie Pike

According to a new report by Insider Intelligence, Meta’s share of ad revenue in relation to other platforms is over double its share of consumer time.

In 2023 alone, marketers are projected to spend more than $350 million on U.S. ads, and the average U.S. adult will spend 12 hours and 11 minutes per day on media and entertainment platforms. Only 34 minutes a day, however, will be spent on Meta (Facebook and Instagram, that is).

Google and Meta are the two most profitable ad publishers of all time, accounting for a combined 48.4 percent of all U.S. digital ad spend in 2022, according to The Wall Street Journal. (Side note: 2022 was the first year that Google and Meta accounted for less than 50 percent of market share since 2014.)

But Meta doesn’t dominate users’ time spent online like Google does.

So what gives? Are we advertising irrationally?

One answer could be a better return on ad spend.

According to Instapage, surveyed marketers do say Facebook and Instagram deliver a better ROAS than YouTube, TikTok, and Snapchat.

But Google still took the top spot.

We think that Meta earns a disproportionate amount of ad revenue because (in no particular order) A) it’s humongous user base, B) it’s advertiser UI is simple, C) its attribution and ROI tools remain top-notch despite Apple’s new privacy features, and C) it’s effective at awareness, retargeting, and direct response, unlike many platforms that deliver in one of those areas but not others.

As Insider Intelligence puts it: “Meta’s ability to draw ad revenues so out of proportion with its user engagement is a testament to the company’s history of technical and operational prowess.”

Lastly, we suspect that advertisers continue spending on Meta because 87 percent say they are already using Meta. And, as they say, better the devil you know than the devil you don’t.

Other news

  • Twitter is now X, which has elicited a lot of feelings from the Internet. This is how the infamous Twitter bird logo was created.
  • Ad-supported sales grew 5.9x this Prime Day compared to the 30 days prior, according to Marketing Dive, and average cost-per-click increased by 50 percent.
  • Pepsi is trying to replace Coke as the mixer of choice for rum. See the campaign here.
  • NFL teams unveiled throwback jerseys that they will wear in select games during the upcoming season. Kudos to the Seattle Seahawks for this throwback video with all the 90s nostalgia to announce the move.

That’s all for this week’s Marketing Roundup. Check back in next Friday for more news. And subscribe to our newsletter below for additional updates.