Advertising Trends: Meta Dominates, TikTok Resilient, Snap Faces Challenges
Q1 Advertising Investments: brands Double Down
Despite macroeconomic uncertainties, brands considerably increased their advertising investments in the first quarter, focusing on demand generation. According to data from MikMak, which works wiht 2,500 major global brands, Meta platforms consistently lead as the primary traffic source.
- Meta’s Dominance: Meta accounts for at least 50% of an advertiser’s budget, and even more for small-to-medium-sized businesses (SMBs), sometimes reaching up to 90%.
- Alphabet’s Strong Showing: Alphabet follows Meta as a key traffic driver.
- TikTok’s Ascendancy: TikTok ranks third, demonstrating its growing importance in the advertising landscape.
Did you know? Meta’s robust Q1 earnings reflect its pivotal role in advertisers’ strategies, highlighting its continued relevance in driving demand.
If you look at Meta this week, or Alphabet, and even snap, if you get under the hood, what we’ve consistently seen in Q1 is that brands invested in advertising, despite anything that was happening in the macro backdrop.And the reason why is as brands need to drive demand right now. And the number way that they’re going to do that is by investing in advertising.
Snap’s Position: SMB Challenges and Market Reaction
While Snap reported year-over-year advertising growth, concerns about the rest of the year tempered market enthusiasm.The apprehension stems from the fact that a meaningful portion of Snap’s advertisers are SMBs, which are particularly vulnerable to economic factors like tariffs.
Snap represents a smaller portion of overall brand investments,especially among Fortune 1000 companies. It typically ranks in the bottom 10 of trafficked channels, trailing behind platforms like Pinterest and The Trade Desk.
Pro Tip: Diversifying advertising channels is crucial. Brands should explore platforms like Pinterest and The Trade Desk to mitigate risks associated with over-reliance on a single platform.
Where Snap, you know, communicated trepidation is what’s happening for the rest of the year, and the reality is a good portion of Snap advertisers are SMB businesses that are going to be heavily impacted by tariffs.And so,I think that’s what the market was really responding.
Short-Form Video: Instagram Reels Lead,TikTok Follows
when it comes to short-form video advertising,Instagram,particularly with Reels,remains the top choice for brands. TikTok follows, with YouTube also playing a significant role.
Brands have many options to invest their dollars, and if it comes to a platform where they wont to invest in short-form video, the number one place that they’re still investing is Instagram, with Reels being a big portion of that, followed by TikTok, followed by YouTube.
TikTok’s Resilience and potential ban
TikTok experienced a temporary setback in Q1 when it went dark in the U.S. on Jan. 19. Though, traffic rebounded by March 1, surpassing Q4 levels by April 1. Brands view TikTok as a powerful channel for both brand building and driving conversions.
Despite past threats of a ban, advertisers continue to invest in TikTok, anticipating further extensions of any deadlines.
If you talk to any brand advertiser, that’s a very powerful channel. It helps you build brands and drive conversion all at once, and brands will consistently tell you they will continue to invest in that channel until they are told they no longer can.
Where Would Ad Dollars Go if TikTok Were Banned?
If TikTok were to go dark, meta and Alphabet would likely see increased traffic. pinterest would also benefit, as it is indeed considered a brand-safe surroundings that drives both demand and long-term brand equity.
If TikTok did go dark, I think what we saw all around January 19th is that Meta gains traffic, that Alphabet gains traffic, and Pinterest also gains traffic. And the reason why Pinterest is a dark horse that no one talks about is that Pinterest is really considered one of the safest places on the internet.
