After a slow 2022, social media ad revenues increased 8.7% year-over-year in 2023, reaching $64.9 billion. According to the report, the results came from the continued proliferation of social media and creator marketing growth across multiple platforms and new social media forms. Notably, second-half revenues accounted for $4.1 billion of the $5.1 billion total increase over 2022. 

In other news, search ($88.8 billion) and display ($66.1 billion) revenues remained high, with search at 5.2% and display at 4% year-over-year growth, respectively.

Trends in 2024

IAB notes that advertising is undergoing a rapid transformation, driven by channels offering addressable audiences at scale, personalized messaging and privacy-compliant standards.

Among the trends in 2024, social media platforms will continue pursuing innovations that merge social commerce, reality tech and influencer marketing. In addition, generative AI will become more widely used and adopted.

Though AI can have pitfalls of misinformation, especially in an election year, the industry’s ethical usage of it could further change advertising and help even the playing field.

“It’s everything from being able to leverage AI to create hyper-targeted advertising to the backend processes and optimizing on the fly. It’s a mixture of machine learning and AI. That sufficiency and optimization shines through as well,” Koch said. “What that will do is also help democratize advertising between the big players and the small players because everybody will be able to test and create hyper-targeted ads.”

Privacy will continue to be a top concern, especially as the industry moves further away from cookies. The IAB views privacy as more of a permanent change than a trend, now and in the future.

“Retail media networks, creator economy and streaming media get outside of the cookie, essentially,” Koch said. “They are privacy-by-design solutions, so that’s why we’re seeing that growth in the report of retail media, CTV. That’s where that growth is coming from, and that’s where we think that growth is going to continue in 2024 and beyond.”