Omdia: Social media advertising to command nearly half of global online ad revenue by 2030 as market reaches $640 billion

LONDON--(BUSINESS WIRE)--Social media advertising revenue is projected to rise at a compound annual growth rate (CAGR) of 12% over the next five years, reaching $640 billion by the end of 2030, according to Omdia’s Social Media Advertising Market Landscape 2026 report, its first-ever research focusing exclusively on social media advertising.

“AI-driven targeting and recommendation algorithms are turbocharging the advantage of these big players,” said Kia Ling Teoh, Principal Analyst at Omdia.

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During the same period, social media’s share of total online advertising is expected to increase by 10 percentage points, from 33% to 44%, making it one of the fastest-growing advertising segments alongside retail media.

Rising user engagement, advertisers' growing preference for full-funnel solutions, and the proliferation of self-serve platforms are key factors underpinning social media platforms’ sustained performance.

Social media advertising revenue is increasingly being driven by video formats such as Reels, TikTok, Shorts, and Stories. In full-year 2025, video accounted for 60% of total social media advertising revenue. Platforms are not only expanding their video advertising revenue but also capturing budgets historically directed toward other digital channels, including online publisher inventory and broadcasters' digital offerings. Over time, increases in high-value video ad load, improved commerce capabilities, and clearer segmentation between performance-driven and premium formats will drive additional revenue growth for social platforms.

Crucially, 90% of global social media advertising revenue is generated by just half a dozen apps, namely Facebook, Instagram, Douyin, YouTube, TikTok, and WeChat, highlighting the segment’s highly concentrated market structure. Meta effectively dominates through ownership of both Facebook and Instagram apps. Together, they accounted for 54% of the social media advertising revenue in 2025, rising to almost 70% when China is excluded.

“AI-driven targeting and recommendation algorithms are turbocharging the advantage of these big players,” said Kia Ling Teoh, Principal Analyst at Omdia. “These capabilities favor ‘walled garden’ platforms with deep user data and sophisticated computing infrastructure, locking out smaller players and funneling ad dollars to the top.”

However, maintaining this dominance will require a balanced approach to both monetization and user experience. Over-saturating feeds with ads can alienate users and undermine long-term engagement. Sustained growth will depend on balancing AI‑driven ad optimization with preserving the user experience.

About Omdia

Omdia, part of TechTarget, Inc. d/b/a Informa TechTarget (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets grounded in real conversations with industry leaders and hundreds of thousands of data points, make our market intelligence our clients’ strategic advantage. From R&D to ROI, we identify the greatest opportunities and move the industry forward.