Meanwhile, competition for advertiser spend is as fierce as ever, with Snap Inc. CEO Evan Spiegel laying out a plan to bring in more SME business, while X has overhauled its ad platform in pursuit of the same – but is facing one of the biggest anticipated pullbacks from an advertising platform in 2025, according to Kantar.[1] In the wake of the US presidential election, X (along with its owner Elon Musk) is both more visible and more contentious, but it remains to be seen whether this will help or harm its advertising ventures.
In B2B, LinkedIn has chosen to redouble its efforts around video, which continues to drive double-digit growth in the UK alone, according to IAB UK’s Digital Adspend report for H1 2024.[2]
Generative AI is still a major force shaping the innovations coming out of social media platforms, such as chats with brands and new video tools – but a large proportion of advertisers still appear hesitant, with quality concerns coming to the fore. These and more stories are explained and analysed in our latest edition of Social Trends Quarterly.
X is set to suffer ‘the biggest recorded pullback from any major global ad platform’ in 2025 as advertiser confidence continues to plummet
Regular readers of Social Trends Quarterly will recall that X’s dwindling appeal for advertisers has been a frequent subject of coverage: from advertisers abandoning X for LinkedIn in Q1 2024 to X’s struggles with profitability and diminishing ad revenue in Q3. Multiple successive instances of hostility from X owner Elon Musk towards advertisers, which culminated in a lawsuit by X against advertising coalition the Global Alliance for Responsible Media that led to its dissolution,[3] have only exacerbated the situation.
Now, research from Kantar has revealed that a net 26% of marketers are planning to reduce their ad spend on X in 2025, in what the researcher has said would be “the biggest recorded pullback from any major global ad platform.”[4] In particular, Kantar highlighted the chronically low levels of trust placed by marketers in X’s ad environment and brand safety, with only 12% of marketers deeming ads on X to be trustworthy and just 4% believing they provide brand safety. The data was sourced from interviews with roughly 1,000 senior marketers across the globe for Kantar’s Media Reactions 2024 report.
In late October, X announced a revamped ads platform in a bid to court small and medium enterprises,[5] promising AI-enhanced targeting efficiency that saves time, improves performance and gives control over desired cost per action (CPA). The X Business website extols the potential of X as “a single interface for SMBs” that “presents a unique opportunity for small businesses to grow and succeed in the digital marketplace”.[6]
Much like Snapchat, X may be hoping to be able to diversify its ads business to a greater extent by appealing to small and medium enterprises, competing for a growing share of what is ultimately a larger pie. But Kantar’s research indicates that it will need to overcome significant hurdles with regard to advertiser trust and confidence first.
News of continual declines in user numbers such as those reported by the Financial Times[7] – and X’s own internal data, which showed a 5% decline in EU users between February and July 2024[8] – will likely not have improved optimism. With that said, X reportedly told advertisers in September that it had more than 570 million monetisable MAUs in the second quarter of 2024, and more than 251 million monetisable DAUs – putting it ahead of Pinterest (522 million MAUs) and Reddit (91.2 million daily active uniques).[9]
However, Josh Rosen, president of Hotspex Media, told Digiday: “The ad experience has historically not been a good one for brands and users. There is no data to demonstrate X users are more likely to engage with ads more often compared to Meta and TikTok, where this has been proven over and over.”
Even political advertising around the US election has not aided X in meeting its ad revenue goals, with the Financial Times reporting less than two weeks prior to the election that X was “on track to fall well short of its goal of bringing in $100mn in revenue from political advertising in 2024”, having brought in less than a fifth of its target amount.[10] Controversy surrounding the prevalence of election disinformation on X[11] – while this has afflicted many social platforms to various extents – may further impact trust in X’s brand safety.
Threads’ lack of identity is impacting its influencer push
Meta-owned Threads turned one in July, but despite its rapid growth – crossing 200 million monthly active users (MAUs) less than a month after its first birthday[12] – in many ways the platform is still searching for a distinctive appeal. Business Insider opined on the platform’s ‘identity crisis’ at the time, with Emarketer analyst Jasmine Enberg telling the publication “we don’t know what [Threads] is, and I don’t think Meta knows exactly what it wants to do with it either”.[13]
This lack of cohesion is affecting Meta’s efforts to promote Threads as a viable platform for creators. Meta has enticed influencers over to Threads with generous payments in exchange for generating engagement on the platform, but as reported by Engadget,[14] many have confessed to not understanding how the Threads algorithm works. One influencer with the programme reported that a certain type of video would do well one week, and the next, “[would be] getting like, nothing”.
This doesn’t bode well for Threads’ potential to create a virtuous cycle in which the presence of a number of influencers on the social network encourages others to take an interest. Instead, it seems likely that creator engagement will dry up as soon as the funding does.
Threads is also struggling to control a surge of what has been dubbed ‘engagement bait’ (as well as ‘rage bait’): namely, spammy posts that game the site’s algorithm by attracting replies (as Threads’ algorithm has been determined to heavily favour posts with numerous replies). Instagram head Adam Mosseri acknowledged that “We’ve seen an increase in engagement-bait on Threads and we’re working to get it under control.”[15]
In the replies to Mosseri’s post, multiple users attributed the problem to creators being paid to gain engagement on Threads. Whether true or not, this indicates that some of Threads’ user base perceives the introduction of influencers to be a net negative for the platform.
In its bid to expedite the growth of Threads – and thus secure its relevance – it seems as though Meta has put the cart before the horse, not waiting for Threads to develop its own culture or unique strengths that would lead to home-grown influencers successfully building a following. Unfortunately, these moves threaten to exacerbate the problem, as creators throw different topics at the proverbial wall to see what sticks, or lean into the polarising content that is already proliferating – to the detriment of the atmosphere on Threads.
Snap, Inc. CEO vows to grow the company’s ads business by focusing on SMEs
Snap, Inc. CEO Evan Spiegel celebrated the company’s 13-year anniversary in September with an employee memo that set out a renewed focus on advertising.[16]
Spiegel acknowledged that employees “may be wondering why” Snap’s “share price performance has lagged the overall market” in the past year despite its success in reversing revenue declines. He attributed this to a lack of growth in Snap’s ads business, and outlined a shift in focus from “a small number of large customers spending against brand-oriented upper funnel goals” to “a much larger number of small- and medium-sized customers who are bidding against lower funnel goals”.
Spiegel reported that the company had found SMEs offer “more stable and predictable” revenue, while lower-funnel revenue is “‘stickier’ because it is more closely tied to key business objectives and positive returns on ad spend”.
In Snap’s Q3 2024 earnings report, the company disclosed that “ongoing momentum” with its direct response products and “growth in small- and medium-size businesses” led to active advertisers more than doubling year-on-year in Q3,[17] which indicates some early fruit from the new direction.
However, Snap’s Q3 results also pointed to some concerning trends with regard to stagnating user growth, with North America in particular – by far Snapchat’s most lucrative market in terms of average revenue per user (ARPU) – staying flat at 100 million DAUs for four consecutive quarters. While Snapchat’s overall DAUs grew by 9% year-on-year to 443 million, these figures don’t paint an optimistic picture in terms of the addressable audience for a growing ads business.
Spiegel also hinted at a move away from Snapchat’s signature vertical video, which was “a novel and unique offering” when Snapchat pioneered it but now is “less differentiated than it once was”.[18] Snapchat has recently launched two new ad formats: Sponsored Snaps and Promoted Places,[19] both of which make use of vertical video ads, but in the context of a messaging experience and a map experience respectively, providing opportunities for users to engage with businesses further down the funnel.
A continued bright spot is the growth Snap has enjoyed in Snapchat+ subscribers, which grew from 11 million in August[20] to more than 12 million as of the end of October,[21] X indicating clear appetite among Snapchat’s users to pay for premium features. Yet to appease its shareholders, Snapchat will need to prove that it can grow its user base and advertising business in a comparable fashion.
TikTok’s partnership with InMarket could close the loop on social campaigns
TikTok has partnered with location data intelligence company InMarket, which claims to offer an “accurate and holistic view into how your media drives incremental consumer visits and sales”, using a combination of foot traffic analysis and credit/debit card transactions.[22]
TikTok has reported that so far, for 121 out of 126 retail and dining campaigns measured (96%), there was a statistically significant lift in physical location visits.
Marketing campaign attribution across touchpoints is always a challenge, and so if TikTok can truly link its advertising to a meaningful response offline, it may well become a more important channel of consideration for omnichannel brands in categories like retail, hospitality and dining – as long as they believe that they can reach the right audiences via TikTok.
With TikTok said to be an important channel for generation Z when looking for dining inspiration (something that was often misreported as gen Z shunning Google for TikTok, although the reality is more nuanced[23]) and travel ideas,[24] hospitality brands may be particularly keen to close the reporting loop and understand how their TikTok campaigns are translating into real-world visits and sales.
It’s hard not to draw parallels to Snapchat’s Snap Map, and in particular, its Sponsored Places ads, and see how platforms are setting out to drive meaningful results – and attribution – from the trend of younger generations using social media for inspiration.
X access is restored in Brazil, returning an important audience to the platform – mostly
Access to X was restored for all Brazilian users on 8 October 2024,[25] more than a month after the platform had been banned by Supreme Court Justice Alexandre de Moraes for failing to comply with requests to suspend certain user accounts and to name a legal representative in the country.[26]
Bluesky, a much smaller decentralised competitor, was a major beneficiary of the ban: The Brazilian Report, citing data from Similarweb, calculated that Brazilian users made up 85% of Bluesky’s global user base during X’s ban.[27] The platform also reported gaining more than 2.6 million new users over the course of five days, the vast majority of whom were Brazilian.[28] Threads enjoyed a spike in app downloads, but its influx was more muted than that of Bluesky.
After a five-week-long ban, X was deemed by the Supreme Court to have fulfilled “all the requirements necessary” to be unblocked, which included payment of a fine levied against the platform after it momentarily circumvented the ban in September.[29] X’s Global Government Affairs account posted: “X is proud to return to Brazil. Giving tens of millions of Brazilians access to our indispensable platform was paramount throughout this entire process.”[30]
With the ban lifted, Brazilian users began to flock back to the platform – mostly. Figures cited by The Brazilian Report, again from Similarweb, show that the number of Brazilian X users on 14 October – close to a week after the block was lifted – sat at 3.95 million, less than two-thirds of the 6.39 million active on X before the ban.[31] Bluesky has maintained an elevated level of activity, passing 10 million users in mid-September (with an announcement post that was also translated into Portuguese)[32] and experiencing a further wave of new joiners from North America and the UK in the wake of the US presidential election.[33] With that said, its scale remains small compared to the hundreds of millions of global users enjoyed by rivals X and Threads.
Nevertheless, X is experiencing a continued pattern of declining user numbers with figures published by the Financial Times (sourced from Similarweb) showing a drop of a third in the UK from September 2023 to 2024, and a fifth in the United States over the same period.[34] Undoubtedly X is faring better with the site now unblocked in Brazil – but it may not have acted quickly enough to prevent more attrition in one of its largest markets.
TikTok pushes live shopping for the holiday season – but there are still hurdles to overcome in the west
TikTok is pitching live shopping to brands ahead of the 2024 holiday season, placing a heavy emphasis on livestreaming at its first Partner Summit, held in California,[35] and planning to feature celebrity-hosted ‘super livestreams’ to attract consumer interest.
Nico Le Bourgeois, Head of US Operations at TikTok Shop, told Modern Retail that TikTok is “building a full ecosystem because going live is not easy. It’s a combination of training brands and agencies to learn the technique of going live, finding the right talent and connecting them with the right products.”[36]
However, more than techniques and talent may be needed to sell live shopping to western consumers. While live shopping is a popular phenomenon in China, home to TikTok’s parent company ByteDance and its sibling app, Douyin, attempts to replicate its success in the west have repeatedly faltered.
Amazon launched Amazon Live in 2019, recruiting influencers from TikTok and YouTube to host shoppable livestreams, but in 2022 creators spoke to Business Insider about struggling to build audiences and move sales.[37] Instagram, which would have seemed like a more natural fit for live shopping due to the existing culture of influencers and brands on the platform, killed off live shopping in March 2023, less than three years after its launch.[38] Facebook had shut down its own live shopping functionality the October prior.
One agency executive who spoke anonymously to Modern Retail expressed concern about the risks involved in the live format. “These brands… have huge legal teams and want to cross every ‘T’ and dot every ‘I’ — with lives, you can say or do one thing off-script, and then it’s a compliance issue,” they said.[39]
Some brands have reportedly found success with the format, however: earlier in the year, UK beauty brand P.Louise broke records for the amount of revenue generated on TikTok Shop by a UK brand, turning over £1.6m in revenue over 24 hours.[40] Some of the products sold were heavily discounted – a popular technique in China known as ‘flash sales’ that creates urgency during a livestream. Canvas Beauty, a darling of TikTok Shop, became the first brand to reach $1m in sales during a TikTok livestream, hitting the milestone during a 6-hour broadcast.[41]
Some categories, such as beauty, may be uniquely suited to the livestream format as they have already built huge social followings and creators can easily show off the products on stream. However, while a few big livestreams are great for building buzz, they don’t necessarily herald the arrival of a wider trend. TikTok may be able to bring its particular expertise as a China-owned company – something that the likes of Meta and Amazon lack – to bear on live shopping and make a success of it where other tech giants have failed; but it will still depend on western consumers getting on board with the format. A new Emarketer report has revealed that US consumers have low trust in social commerce – with 76% preferring to purchase through a retailer’s website instead – which suggests TikTok might need to work hard to win over shoppers.[42]
LinkedIn is doubling down on video with Accelerate ads and Live Event previews
LinkedIn has published a range of findings from research it recently commissioned from GWI, ‘Business of Influence’, which surveyed more than 1,700 B2B tech buyers in the US, the UK and India to learn about how they make decisions.[43] Among its findings was the statistic that 63% of B2B buyers say short-form video content helps inform their buying decisions, while 67% of buyers who are aware of influencer content say it plays a ‘critical role’ in the consideration stage of the IT buying process.
LinkedIn has taken increasing steps to nurture the emergence of video on its platform over the past year, such as by trialling a ‘TikTok-style’ dedicated video feed[44] and extolling the brand-building benefits of video for B2B.[45] Alongside findings from the Business of Influence research, LinkedIn announced that it would be introducing video ads to Accelerate, its AI-powered campaign experience.[46] It has also rolled out new Live Event Ads, which include the ability to offer a ‘sneak peek’ of the event via a 30-second video. LinkedIn’s own internal data reportedly shows that video is the fastest-growing format on its platform, with uploads up 34% year-on-year.
Another recent piece of research from LinkedIn’s B2B Institute, produced in partnership with MediaScience, examined how 770 users of the LinkedIn platform responded to 109 real B2B ads, all of which were video.[47] The research found that only 53% of users exposed to a given ad would recognise it, and only 36% of these could identify the brand, suggesting that the vast majority of video ads on LinkedIn were failing to drive recall or brand recollection.
Video is gaining more traction as an effective form of ad messaging for B2B, not just B2C, and LinkedIn’s efforts will no doubt advance this further. However, making the most of the format may require a shift in how B2B marketers think of and promote their product.
Marketing Week, analysing the findings of the B2B Institute’s research, speculated that the videos’ presence on LinkedIn “may have influenced the low recall rates”, noting that LinkedIn is “typically less associated with advertising in comparison to other social media channels.”[48] LinkedIn is working to change this, however, having progressively upped its ad offering in a bid to compete with social advertising titans like Facebook and Instagram – particularly as X has suffered from a loss of advertiser interest, leaving a gap available to be filled.
Snapchat enables brands to enter the inbox with Sponsored Snaps
Snapchat is rolling out an ad format that will allow brands to reach users directly in their inbox.
The new ad type, known as Sponsored Snaps, takes the form of a full-screen video Snap that users can choose to open.[49] Users can then respond directly to the advertiser or visit a link provided in the ad’s call to action. Snapchat has noted that Sponsored Snaps are not delivered with a push notification, which means that they avoid interrupting the user’s experience outside of Snapchat; and if they are left unviewed, they will be removed from the inbox. Sponsored Snaps are initially being trialled with Disney as launch partner.
In an employee memo commemorating 13 years at Snap Inc., prior to the formal launch of Sponsored Snaps, Snap CEO Evan Spiegel noted that as the ad format continues to evolve, Snap is “excited to enable more messaging features powered by generative AI and integrated into advertiser CRMs to help our partners communicate with their customers at scale”. However, he emphasised, “your conversations with friends are private and are not used for advertising purposes”.[50]
Prior to the launch of Sponsored Snaps, brands were able to advertise in users’ conversations with My AI, Snapchat’s generative AI chatbot, via sponsored links powered by Microsoft Advertising.[51] Upon launch of the new ad partnership in September 2023, Microsoft proclaimed: “Snapchat reaches over 75% of 13- to 34-year-olds in over 20 countries, and the My AI chatbot is a key new offering within the app.”
Sponsored Snaps promise an opportunity for brands to reach this user base in a more immersive, direct and interactive fashion, but whether they see results will depend on how happy users are to find advertising in the same space that they hold private conversations with friends.
Meta touts adoption and effectiveness of its generative AI ad tools – but advertisers are hesitant
Just under a year on from Meta’s release of its first generative AI-powered features for ad creative,[52] the company proclaims that its generative AI tools are seeing “strong adoption”, with more than one million advertisers using the tools. According to Meta, the tools were used to create more than 15 million ads in the month to 25 September.[53]
Providing some context for the one million figure, Adweek reported from Ad Week New York that the number refers to the quantity of advertisers who use “at least one of [Meta’s] gen AI tools monthly”.[54]
While not bad, this doesn’t perhaps paint the rosy picture of surging adoption that Meta would like it to, as one million is about a tenth of Meta’s advertisers in rough ballpark terms, using the most recent available figure from Q4 2020 as a guide, in which Meta reported that more than 10 million advertisers were using its services.[55] To look at things another way: approximately 90% of Meta’s advertisers are not yet using generative AI ad tools.
There are a number of potential reasons for this, such as lack of confidence in their output, lack of familiarity with the tools, or perhaps hesitance around the way that audiences will receive them. A recent Modern Retail article suggests that the issue mostly relates to comfort and control, quoting one marketing strategist as saying that they haven’t seen “a lot of our clients hand over creative keys to generative AI”. Another CMO quoted believes that generative AI tools are not yet advanced enough for consumer-facing use.[56]
Meta may be hoping that its latest figures invite more confidence; the company has revealed that ad campaigns using generative AI features resulted in an 11% higher clickthrough rate and a 7.6% higher conversion rate compared with campaigns not using these features.[57] Meta will also be under pressure to prove that its AI ventures are paying off following its Q3 earnings, which warned of “a significant acceleration in infrastructure expense growth” for 2025 that the company has attributed in part to its ongoing investment in AI.[58],[59]
At Advertising Week New York, Meta further announced new AI animation tools on Facebook and Instagram that can transform still ads into video.[60] The company stated that users now spend 60% of their time on both sites watching videos. Meta’s new tools will also enable advertisers to adjust the aspect ratio of videos – turning a horizontal video into a vertical video, for example. The new tools will be integrated into Ads Manager as part of its Advantage+ creative suite, set to release in early 2025.
One ad agency CEO interviewed by Modern Retail believes that “Video is really where the big pain points are on creative … When we have better tools for video, I do imagine that that is going to be a pretty big adoption and game changer.” Perhaps this could lead more advertisers to see the value in Meta’s generative AI, providing the quality is right.
Meta enables businesses to set up AI responses to click-to-message ads
At the Meta Connect 2024 developer conference, Meta announced that it will be expanding its generative AI-powered chat tools to “thousands of businesses” that use click-to-message ads on WhatsApp and Messenger in English.[61]
As a result, businesses using these ads will be able to set up an AI chatbot that instantly responds to queries from customers interested in the advertised product. In its blog post announcing the update, Meta used the example of a lipstick ad from cosmetics brand La Lueur, showing a customer messaging the brand to ask “is it longwear?” The chatbot responds that the product is long-lasting and provides information on its hydrating properties.
Responses in the sample conversation feature a ‘generated by AI’ label, while customers are also notified that by interacting, they agree to Meta’s AI Terms.
Reporting on the news, TechCrunch questioned how well customers would respond to the ads,[62] citing a study commissioned by customer experience platform Callvu that found 81% of respondents would rather wait ‘at least some amount of time’ to speak with a live agent rather than chat with a bot.[63] However, it may be more accurate to think of the click-to-message ads as enhanced product descriptions rather than customer support agents.
Customers interacting with an ad are displaying interest in learning more about a product, or are responding to a call to action that invites conversation (such as “Let us help you pick a shade” in the example of LaLueur). This type of interaction will be easier to distil into an exchange with an automated agent than a customer support issue that may contain nuance requiring human expertise.