Forrester expects global social advertising spend to reach $165.6 billion in 2023, up from $75 billion in 2018 — a CAGR of 17.1%. Asia Pacific and the rest of world will grow fastest, capturing the US and Europe’s share of global social advertising spend. Asia Pacific’s share of global spend will increase from 30% in 2018 to 35% in 2023, mostly thanks to growth in China.

In addition, with slowing growth in the number of social users, revenue per user is the main way the social giants can drive revenues across key markets. Value-added formats like video have been the primary drivers of revenue per user on social platforms. Social video advertising spend will grow from $17.6 billion in 2018 to $56.5 billion in 2023 — a compound annual growth rate (CAGR) of 26.3%.

Here are some key takeaways from the report:

  • China’s social advertising spend will triple by 2023. Asia Pacific will replace North America as the region with the highest social advertising spend. China already accounts for 44% of Asia Pacific’s social advertising spend. We expect it to grow from $9.9 billion in 2018 to $27.6 billion in 2023 — a CAGR of 22.8%. China’s key social players have acquired huge user bases and will start monetizing them aggressively. Revenue per user will drive China’s social advertising spend. Social media users in metropolitan China are highly receptive to ads, engaging with more ads than their peers in other regions.
  • Asia Pacific outside China is also driving up revenue per user. User growth is slowing down across most of the key markets in Asia Pacific except India. As such, key social players are now focusing on increasing revenue per user to drive revenues. Twitter has been experimenting with increasing its ad loads: As a result, Japan, the largest market for Twitter outside the US, registered 35.1% growth in its revenue per user in 2018.
  • Other social platforms are focusing on video in Asia Pacific. While short video apps were the main surprise for social marketers in 2018, players like Tencent, Twitter, and Weibo are now also growing their video advertising revenues. Their efforts to facilitate the creation and distribution of video content on their platforms have created an environment that is more conducive to video ads.