The Current State of Social Media Marketing Software 2022
Introduction
Social media marketing is the use of social media platforms or social networks to promote a product or service. Although the terms e-marketing and digital marketing are still dominant in academia, social media marketing is becoming more popular for both practitioners and researchers. With new features and platforms emerging every day, social media marketing is constantly evolving.
With over 80% of consumers reporting that social media—especially influencer content—significantly impacts buying decisions, marketers across industries are driving the evolution of social media marketing (SMM) from a stand-alone tool to a multipronged source of marketing intelligence on an increasingly important—and growing—audience.
Market size & Growth rate
The global investments in marketing services amounted to USD 457.62 billion in 2018 compared to USD 375.19 billion in 2010, with a CAGR of approximately 12% from 2021-2026.
The global social media market size is expected to grow from $159.68 billion in 2021 to $223.11 billion in 2022 at a compound annual growth rate (CAGR) of 39.7%. The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $833.50 billion in 2026 at a CAGR of 39%.
Market Drivers
Rising penetration of mobile, tablet and other electronics and rising data consumption will drive the social media market. An increase in sales of internet-accessible electronic devices such as smartphones and tablets leads to an increase in time spent on social media websites. For example, the total number of smartphone devices across the world reached 6 billion in 2020, that is eight people out of 10 owned a smartphone in 2020, eventually driving the revenues of social media companies. This increasing use of smartphones is expected to increase internet usage, hence driving the social media market. Major companies in the social media market include Facebook, Youtube, Instagram, Twitter, and LinkedIn.
Market Trends
Social media companies are offering their social media platforms for electronic commerce of goods and services to drive revenues. This can be attributed to the increasing adoption of e-commerce and online shopping among consumers, owing to the growing internet and smartphone penetration. For instance, according to an e-commerce information source; Internet Retailer data 2020, U.S. e-commerce sales, increasing due to the COVID-19 pandemic, grew 44% and represented more than 21% of total retail sales.
Social media platforms allow for targeted advertising based on consumers’ social behaviors, geographic locations, and demographics. Instagram, a photo and video-sharing social networking service, has added a ‘Shopping’ tab to the ‘Explore’ page in its app. According to an “Instagram for Business survey data 2022”, 44% of people use Instagram weekly to shop using features including the Shop tag. Other social media companies such as Snapchat and Twitter have also integrated shopping advertisements to facilitate direct purchases within their platforms.
Challenges & Risks
The outbreak of the Coronavirus disease (COVID-19) has acted as a significant restraint on the social media market in 2020 as businesses were disrupted due to lockdowns imposed by governments globally. COVID-19 is an infectious disease with flu-like symptoms including fever, cough, and difficulty in breathing. The virus was first identified in 2019 in Wuhan, Hubei province of the People’s Republic of China, and spread globally including Western Europe, North America, and Asia. Steps by national governments to contain the transmission have resulted in a decline in economic activity and restricted movement of goods and services with countries entering a state of lockdown. The outbreak had a negative impact on businesses throughout 2020 and into 2021. However, many media markets have been unaffected or benefited from this as they transmit their content remotely through digital channels. It is expected that the social media market will recover from the shock across the forecast period as it is a ‘black swan event and not related to ongoing or fundamental weaknesses in the market or the global economy.
Opportunities
Home computers, laptops, tablets, smartphones, and even internet-enabled televisions mean people can easily access the web from anywhere at any time. Faster connections, new devices, and new online applications have all helped to change the way people work, socialize and shop. It is now easier than ever for businesses to directly target customers with marketing campaigns, promote new products or services while building brand awareness, and personally interact with existing and potential customers.
