Social network video advertising is steadily getting a larger share of ad budgets. For the first time, we have created estimates for social network video ad spending, including Facebook, Snapchat and Twitter to address this growing segment. In 2018, US social network video ad spending will increase 38.1% to $7.85 billion.
Facebook is driving social video ad growth and will account for 84.9% of outlays. Its video ad business, which includes Instagram, will total $6.81 billion in 2018. Premium costs for in-feed ad spots, driven by high demand from advertisers, are fueling Facebook’s video advertising growth. Though a small contributor, video ad revenues from Facebook Watch are also included.
This year, we expect Twitter to generate one-tenth the amount of video ad revenues Facebook produced, at $633.28 million. Twitter’s ad business is reliant on video advertising as it accounts for 55.0% of total ad revenues. For Facebook, video advertising represents 29.8% of its ad business. Twitter’s video ad sales come mainly from in-feed advertising that appears between user posts. The company is looking to increase revenue from in-stream video ads (e.g., pre-roll ads) by doubling its video output this year and emphasizing news and sports content.