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How Digital Advertising Growth Has Changed in 2022

You probably already know that social media platforms like Facebook, Twitter, and Instagram earn the majority of their revenue from digital advertising. But what if we told you that the trends of where advertisers are spending their ad dollars is shifting…  

It’s become more challenging for traditional digital advertising methods to convert customers in today’s oversaturated market. In a post-pandemic market, advertisers have access to a plethora of data, and targeting customers has never been so accessible… even with the iOS 14.5 update. 

However, spending power is what ultimately makes free markets competitive. The higher the budget, the higher the chance of having your ad found. With all changes in the economy this year, marketing departments have begun to select advertising outlets with greater caution.

Consumers are dealing with a lot of economic uncertainty and the struggle of inflation, which means purchasing trends are changing faster than ever. It’s no longer a growth economy; it’s now a conservative economy. There’s no denying it, advertisers and their agencies are feeling this financial squeeze.

Here are some of the changes we’ve seen so far.

Advertising budgets are being redirected

This past July, for the first time in two years, spending in advertising has declined. From big companies to small brands, this is happening in organizations of all sizes. 

Advertising sales on social media platforms have decreased, and advertisers have begun to restructure their marketing campaigns. This comes as no surprise with the effects of a possible-recession over the last few months already starting to take a toll on return on investments for companies and, as a result, annual advertising budgets. 

According to Appsumer, the adoption rate for advertisers increased almost 4 percentage points to 94.8%. To compare, Facebook adoption decreased by 3 percentage points to 82.8%, and Google’s rate dropped to 94.8% by two points.

Amazon is Outpacing the Rivals

Amazon’s online advertising platform outpaced rivals in growth for the recent quarter. Amazon isn’t experiencing much pain from Apple’s iOS privacy change, which has been a significant challenge for others including Facebook, Instagram and Snapchat.

As of late last year, Amazon commanded over 14% of the U.S. digital advertising market, right after Google at 26.4% and Facebook & Instagram (Meta) at 24%. While growth is slowing at YouTube, especially compared to last years huge growth, it represents a significant portion of Alphabet’s growth over the last few years.

Users are spending more on ads in Apple’s App Store

While Apple has been seeing growth in their digital ads, Google and Facebook are experiencing a decline. 

Users can advertise in Apple’s App Store using their search ads. At the moment, Apple only shows ads on their App Store, News, and Stocks apps. Ready or not, it’s now in the works to include ads on their other App Store pages, too.

Apple’s increased activity in online ads mirrors something that we also saw happen in Amazon. In the same way that Amazon sellers began to spend more on advertising within Amazon, advertisers have also begun to spend more on search ads within the App Store. 

In addition, Apple’s advertising department has been growing exponentially and is becoming increasingly powerful. Based on these recent developments, we predict that advertising may play a bigger role for them in the future.

TikTok pushes ahead of Snapchat

In the secondary of social channels, TikTok is now ahead of Snapchat for both advertiser adoption and share-of-wallet. TikTok’s popularity, along with its push toward in-app shopping and social commerce, is helping drive its ad revenues far above its competitors. The app’s global ad revenues will triple to $11.64 billion in 2022, more than both Snapchat and Twitter combined. Over half of those revenues will come from the US.

How does this affect advertisers?

Brands need a marketing team that is agile in executing strategy shifts to align with the state of the market. Note, each company is unique; what works for one might not work for another, therefore incorporating tests with audiences, assets, and messaging is also crucial across all touchpoints.